Autotel v. Nevada Bell Telephone Company

Filing

FILED OPINION (RAYMOND C. FISHER, JOHNNIE B. RAWLINSON and OTIS D. WRIGHT, II) AFFIRMED; REMANDED. Judge: RCF Authoring. The parties shall bear their own costs on appeal. FILED AND ENTERED JUDGMENT. [8308437]--[Edited: Updated docket text to reflect content of opinion. 09/04/2012 by RY]

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 1 of 19

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AUTOTEL, a Nevada corporation,
Plaintiff-Appellant,
v.
NEVADA BELL TELEPHONE COMPANY,
DBA AT&T of Nevada, FKA
SBC,
Defendant-Appellee.





No. 10-15663
D.C. No.
2:07-cv-01423ECR-GWF
OPINION

Appeal from the United States District Court
for the District of Nevada
Edward C. Reed, Senior District Judge, Presiding
Argued and Submitted
August 29, 2011—San Francisco, California
Filed September 4, 2012
Before: Raymond C. Fisher and Johnnie B. Rawlinson,
Circuit Judges, and Otis D. Wright, II, District Judge.*
Opinion by Judge Fisher

*The Honorable Otis D. Wright, II, United States District Judge for the
Central District of California, sitting by designation.

10547

Case: 10-15663

10550

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 2 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

COUNSEL
Marianne Dugan, Eugene, Oregon, for the plaintiff-appellant.
Roger A. Moffitt, AT&T Nevada, Reno, Nevada; Dennis G.
Friedman (argued) and James C. Schroeder, Mayer Brown
LLP, Chicago, Illinois, for the defendant-appellee.

OPINION
FISHER, Circuit Judge:
This case arises out of a dispute between two telecommunications carriers. Plaintiff-Appellant Autotel is a Commercial
Mobile Radio Service (CMRS) provider wishing to provide
wireless service in and around Pahrump, Nevada. It seeks digital interconnection with the facilities and equipment of
Defendant-Appellee Nevada Bell Telephone Co. (AT&T
Nevada), the incumbent local exchange carrier (LEC) in the
area. After the parties’ efforts to negotiate an interconnection
agreement failed, Autotel brought suit in federal court, alleging that AT&T Nevada violated the Telecommunications Act
of 1996 by (1) refusing to negotiate in good faith; and (2) failing to provide digital interconnection with symmetrical pricing on an interim basis during negotiations, as required by
Federal Communications Commission (FCC) regulations.
The district court dismissed Autotel’s first cause of action
and granted summary judgment to AT&T Nevada on Auto-

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 3 of 19

10551

tel’s second cause of action. Autotel appealed. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
We hold that the district court properly dismissed Autotel’s
good faith claim because Autotel did not exhaust its administrative remedies under our circuit’s prudential exhaustion
requirement. Instead, Autotel appeals from the state public
utilities commission’s summary dismissal of its complaint as
procedurally deficient without addressing its merits. With
respect to Autotel’s second cause of action, we hold that the
interim arrangement and symmetrical pricing requirements
described in 47 C.F.R. §§ 51.715 and 20.11(e) apply only
when the competing carrier does not have an existing interconnection arrangement with the incumbent LEC that provides for the transport and termination of telecommunications
traffic. Because Autotel had such an arrangement with AT&T
Nevada at all relevant times, AT&T Nevada had no obligation
to provide Autotel an interim arrangement with symmeterical
rates.
We remand, however, to permit the district court to consider what, if any, relief is available to Autotel under 47
C.F.R. § 51.717.
BACKGROUND
The Telecommunications Act of 1996 (“the 1996 Act”),
Pub. L. No. 104-104, 110 Stat. 56 (1996), “introduced a competitive regime for local telecommunications services[,]” W.
Radio Servs. Co. v. Qwest Corp. (Western Radio I), 530 F.3d
1186, 1190 (9th Cir. 2008). Before its passage, a single company within each local area typically provided local telephone
service pursuant to a state-sanctioned monopoly. See Verizon
California, Inc. v. Peevey, 462 F.3d 1142, 1146 (9th Cir.
2006). To encourage competition, the 1996 Act imposed on
incumbent LECs, such as AT&T Nevada, the duty to provide
interconnection to competing telecommunications carriers,
such as Autotel. See 47 U.S.C. § 251(c)(2). Interconnection is

Case: 10-15663

10552

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 4 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

the “physical act of linking one network to another through
facilities and equipment.” W. Radio Servs. Co. v. Qwest Corp.
(Western Radio II), 678 F.3d 970, 986 (9th Cir. 2012)
(emphasis, citations and internal quotations marks omitted). It
“allows customers of one LEC to call the customers of
another, with the calling party’s LEC (the ‘originating’ carrier) transporting the call to the connection point, where the
called party’s LEC (the ‘terminating’ carrier) takes over and
transports the call to its end point.” Verizon California, 462
F.3d at 1146.
The 1996 Act adopted several substantive requirements
relating to the quality and nature of the interconnection. For
example, an incumbent LEC must provide interconnection “at
any technically feasible point within [its] network” that is “at
least equal in quality to that provided by the local exchange
carrier to itself.” 47 U.S.C. § 251(c)(2)(B), (C). In addition,
interconnecting carriers must “establish reciprocal compensation arrangements for the transport and termination of telecommunications.” 47 U.S.C. § 251(b)(5). “Under a reciprocal
compensation arrangement, the originating LEC must compensate the terminating LEC for delivering its customer’s call
to the end point.” Verizon California, 462 F.3d at 1146.1
If a carrier requests interconnection, both parties have a
“duty to negotiate in good faith . . . the particular terms and
conditions of” an interconnection agreement. 47 U.S.C.
§ 251(c)(1). The 1996 Act sets forth a procedural framework
for these negotiations. An incumbent LEC and a requesting
carrier may negotiate a voluntary agreement, and either party
1

The FCC has determined that this reciprocal compensation requirement
applies only ‘to traffic that originates and terminates within a local area.’ ”
Verizon California, 462 F.3d at 1146 (quoting In re Implementation of the
Local Competition Provisions in the Telecomms. Act of 1996 (Local Competition Order), 11 FCC Rcd. 15499, 16013, ¶ 1034 (Aug. 8, 1996) (subsequent history omitted)). The parties do not address this limitation, and
it appears from the record that their dispute centers around Autotel’s provision of local service.

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 5 of 19

10553

may ask a state public utilities commission (PUC) to “mediate
any differences arising in the course of the negotiation.” 47
U.S.C. § 252(a). If the parties fail to reach a complete agreement through voluntary negotiations or mediation, either party
may petition the state PUC to resolve the open issues through
compulsory arbitration. See 47 U.S.C. § 252(b).
Autotel first interconnected with AT&T Nevada’s network
in 1994 through five analog loops connecting to the AT&T
Nevada switch in Pahrump, Nevada. AT&T Nevada charged
Autotel a flat monthly fee pursuant to AT&T Nevada’s standard retail tariff for such lines.
In August 1996, Autotel requested digital interconnection
with AT&T Nevada’s network pursuant to §§ 251 and 252 of
the 1996 Act. Voluntary negotiations were unsuccessful, and
in August 2002, Autotel filed a petition with the Public Utilities Commission of Nevada (PUCN) seeking arbitration of an
interconnection agreement. After nearly two years, the PUCN
dismissed Autotel’s petition. It found that Autotel had failed
to comply with the PUCN’s discovery procedures and orders,
and thus had violated its duty to negotiate in good faith. See
47 U.S.C. § 252(b)(5).
In March 2005, the FCC promulgated new rules prohibiting
LECs from charging CMRS providers tariff-based rates for
transport and termination of local traffic. See Intercarrier
Compensation, 70 Fed. Reg. 16,141 (Mar. 30, 2005); 47
C.F.R. § 20.11(d) (2005). The FCC explained that as of April
29, 2005, the effective date of the new rules, “any existing
wireless termination tariffs shall no longer apply” and “[a]fter
that date, in the absence of a request for an interconnection
agreement, no compensation will be owed for termination of
[local] traffic.” Intercarrier Compensation, 70 Fed. Reg. at
16,141. The new rule authorized incumbent LECs to initiate
negotiation of interconnection agreements under the 1996
Act, see 47 C.F.R. § 20.11(e), and in November 2005, AT&T
Nevada took advantage of this provision and requested an

Case: 10-15663

10554

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 6 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

interconnection agreement with Autotel, presumably in an
effort to secure a new compensation arrangement. The parties
still could not agree. Autotel alleges that AT&T Nevada
refused to provide Autotel with the same digital interconnection that it used in its own network unless Autotel accepted
AT&T Nevada’s standard terms and conditions, which were
unacceptable to Autotel.
On August 8, 2006, Richard Oberdorfer, Autotel’s president and sole shareholder, filed a complaint with the PUCN
on behalf of Autotel alleging that AT&T Nevada refused to
negotiate in good faith, and asking the PUCN to order AT&T
Nevada to provide digital interconnection on Autotel’s terms.
The PUCN rejected the complaint without prejudice for failure to comply with the Commission’s procedural requirements for telecommunications complaints. It did not address
the merits. Oberdorfer refiled the complaint a few days later.
The PUCN again summarily rejected the complaint as procedurally deficient. Rather than correct and refile the complaint
with the PUCN, Autotel filed suit in federal district court
under 47 U.S.C. § 207.2
Autotel asserted three claims before the district court. Only
two remain on appeal. We consider each claim in turn.
DISCUSSION
I.

Standard of Review

We review de novo the district court’s order granting a
2

47 U.S.C. § 207 provides, in relevant part:
Any person claiming to be damaged by any common carrier subject to the provisions of this chapter may either make complaint
to the [FCC] as hereinafter provided for, or may bring suit for the
recovery of the damages for which such common carrier may be
liable under the provisions of this chapter, in any district court of
the United States of competent jurisdiction . . . .

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 7 of 19

10555

motion to dismiss under Rule 12(b)(6). See Western Radio II,
678 F.3d at 975-76. We “ ‘generally consider only allegations
contained in the pleadings, exhibits attached to the complaint,
and matters properly subject to judicial notice.’ ” Id. at 976
(quoting Manzarek v. St. Paul Fire & Marine Ins. Co., 519
F.3d 1025, 1030-31 (9th Cir. 2008)). We accept as true all
well-pleaded factual allegations and construe them in the light
most favorable to the plaintiff. See id.
We likewise review de novo a district court’s grant of summary judgment. Verizon California, 462 F.3d at 1150. “We
must determine, viewing the evidence in the light most favorable to . . . the non-moving party, whether there are any genuine issues of material fact and whether the district court
correctly applied the substantive law.” Olsen v. Idaho State
Bd. of Med., 363 F.3d 916, 922 (9th Cir. 2004).
II.

Failure to Negotiate in Good Faith

Autotel claims that AT&T Nevada violated 47 U.S.C.
§§ 251(c) and 252(a) by failing to negotiate in good faith “to
provide interconnection that comports with the [1996 Act].”
We hold that the district court properly dismissed this claim
because Autotel did not exhaust its administrative remedies.
[1] In Western Radio I, 530 F.3d at 1196, we held that
“prudential concerns require that [the plaintiff] present its
good faith claim to the PUC before bringing suit in district
court under § 207.” See also id. at 1200 (“[G]iven the nature
of [the plaintiff ’s] asserted cause of action and the role allotted to state commissions by Congress, . . . the PUC must
address [the plaintiff ’s] good faith claim before that claim
may be brought in district court.”). The parties agree that this
prudential exhaustion requirement applies to Autotel’s good
faith claim but disagree as to whether Autotel satisfied it.
The PUCN twice rejected Autotel’s complaint without prejudice and without considering the merits because the com-

Case: 10-15663

10556

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 8 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

plaint did not comply with the PUCN’s procedural rules. With
respect to the second filing, the PUCN noted that Autotel had
simply “changed the title of the document without addressing
any of the substantive deficiencies or inconsistencies.” The
PUCN “strongly recommended that [Autotel] retain or at least
consult with competent legal counsel” before refiling because
the incomplete submission “demonstrate[d] a lack of required
expertise and familiarity with the Commission’s rules and
regulations.” It explained that it would apply any filing fee
that Autotel had already paid to any new submission.
[2] Autotel contends that its actions were sufficient to satisfy the prudential exhaustion requirement set forth in Western Radio I. We disagree. In the words of the district court:
Were we to conclude that Autotel’s efforts were sufficient, parties seeking to avoid the state regulatory
process would have an easy row to hoe: they would
need only to present a noncompliant application with
the PUCN, wait for the claim to be dismissed, and
then file suit in federal court.
Such an administrative bypass would undermine the statutory
and regulatory framework underlying the 1996 Act. See Western Radio I, 530 F.3d at 1201 (adopting prudential exhaustion
requirement to discourage bypass of the administrative process).
In addition, it is undisputed that the PUCN did not decide
Autotel’s good faith claim on the merits. Western Radio II
presented a similar scenario. There, the plaintiff attempted to
raise its good faith claim before the state PUC by an improper
request for arbitration. See Western Radio II, 678 F.3d at 975.
The PUC summarily dismissed the petition without reaching
the merits. See id. We concluded that the PUC’s dismissal of
the petition “in no way represented a ruling on any good faith
claim” and therefore did not support the plaintiff ’s contention
that it had exhausted its claim. Id. at 978. We therefore

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 9 of 19

10557

affirmed the district court’s dismissal for failure to exhaust
because the good faith claim “was never properly presented
to, nor decided by, the PUC.” Id. at 979.
The same is true here. The PUCN summarily rejected
Autotel’s complaint on procedural grounds and made no mention of the substantive merits of Autotel’s claim. It dismissed
the complaint without prejudice and explained that Autotel
could refile without paying additional fees. In addition to
eviscerating Western Radio I’s exhaustion requirement, permitting this sort of purely procedural decision to constitute
administrative exhaustion would undermine the “uniquely
prominent role” that Congress intended state PUCs to have in
the process of negotiation and approval of interconnection
agreements under the 1996 Act, “including the duty to interpret and enforce the obligation to negotiate in good faith.”
Western Radio I, 530 F.3d at 1200-01. It would upset the balance that we struck in Western Radio I “between the rights of
parties to bring their private causes of action in federal court
and a statutory scheme providing an alternative means of resolution before an agency.” Id. at 1202.
Autotel also argues that its complaint to the PUCN was not
procedurally flawed and that any failure to exhaust should be
excused because returning to the PUCN, which “refuses to
address the good faith issue,” would be futile. These arguments are unpersuasive. The PUCN did not refuse to address
Autotel’s good faith claim. Rather, it enforced the procedural
requirements of the Nevada Administrative Code. See, e.g.,
Nev. Admin. Code §§ 704.68035-.680365 (regarding telecommunications complaints); Nev. Admin. Code §§ 703.280.296 (regarding petitions submitted to the PUCN pursuant to
47 U.S.C. §§ 251 and 252). There is no reason to believe that
had Autotel submitted a procedurally conforming filing, the
PUCN would have rejected it.3 Nor do we agree that because
3

For the first time in its reply brief, Autotel argues that state law does
not provide a process through which it can exhaust its claim that AT&T

Case: 10-15663

10558

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 10 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Autotel appeared before the PUCN pro se, the Commission
should have overlooked any procedural defects in Autotel’s
complaint. See Western Radio II, 678 F.3d at 978-79 (rejecting the same argument). We are not reviewing the PUCN
decision, and the PUCN is not a party to this action. In addition, unlike the pleadings rejected in the cases Autotel cites in
support of this argument, Autotel’s nonconforming complaints were dismissed without prejudice. This is not “an
unjust and excessive sanction.” Cripps v. Life Ins. Co. of N.
Am., 980 F.2d 1261, 1268 (9th Cir. 1992).
Finally, we reject Autotel’s contention — unsupported by
citation to authority — that the procedures set forth in the
Nevada Administrative Code do not apply to its PUCN complaint because its claim was based on federal law. To the contrary, Nevada law expressly provides that the provisions of
the Nevada Administrative Code govern practice before the
PUCN, including in proceedings under the 1996 Act. See,
e.g., Nev. Admin. Code § 703.105 (general practice before the
PUCN); Nev. Admin. Code § 703.280 (petitions submitted
under the 1996 Act); Nev. Admin. Code § 704.680351 (complaints relating to public utilities, including telecommunications carriers). We recognized that state procedural rules
would govern such proceedings when we cited the Oregon
PUC’s procedures as pertinent to our prudential exhaustion
analysis in Western Radio I. See 530 F.3d at 1198.
Nevada violated its duty to negotiate in good faith because there is no “applicable law that requires the state commissions to even decide issues
regarding bad faith in negotiation.” (Emphasis omitted.) “[A]rguments
raised for the first time in a reply brief are waived.” Turtle Island Restoration Network v. U.S. Dep’t of Commerce, 672 F.3d 1160, 1166 n.8 (9th
Cir. 2012) (internal quotation marks omitted). In addition, Autotel cites no
authority in support of this proposition, and nothing in the PUCN’s notices
rejecting Autotel’s complaints suggests the Commission believed it lack
authority to adjudicate the claim. “We will not do an appellant’s work for
it, either by manufacturing its legal arguments, or by combing the record
on its behalf for factual support.” Western Radio II, 678 F.3d at 979.

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

III.

Page: 11 of 19

10559

Failure to Provide Interim Interconnection

Autotel contends that AT&T Nevada violated 47 C.F.R.
§§ 51.715 and 20.11(e) by refusing to provide digital interconnection with symmetrical pricing on an interim basis during negotiation of a permanent interconnection agreement.
We agree with the district court that because Autotel had an
existing interconnection arrangement with AT&T Nevada,
AT&T Nevada had no obligation to provide interim interconnection or symmetrical pricing under these sections.4
First, Autotel argues that under 47 C.F.R. § 51.715, once it
initiated negotiation of an interconnection agreement under
the 1996 Act (in August 1996), AT&T Nevada was required
to provide interim digital interconnection for the transport and
termination of telecommunications traffic at symmetrical rates.5
Autotel contends that the analog interconnection arrangement
between Autotel and AT&T Nevada did not satisfy AT&T
Nevada’s interconnection obligation because it was established before Congress passed the 1996 Act and did not provide for reciprocal compensation. We disagree.
[3] By its terms, 47 C.F.R. § 51.715 requires an incumbent
LEC such as AT&T Nevada to provide transport and termination of local traffic under an interim arrangement only when
it receives such a request from a telecommunications carrier
that does not already have an interconnection arrangement
4

The district court also found that even if AT&T Nevada did have such
an obligation, Autotel’s claim was time barred. Because we agree with the
district court that AT&T Nevada had no regulatory obligation to provide
an interim interconnection arrangement, we do not address this alternate
holding.
5
Under a symmetrical compensation arrangement, “the rate paid by an
incumbent LEC to another telecommunications carrier for transport and
termination of traffic originated by the incumbent LEC is the same as the
rate the incumbent LEC charges to transport and terminate traffic originated by the other telecommunications carrier.” Local Competition Order,
11 FCC Rcd. at 16031, ¶ 1069.

Case: 10-15663

10560

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 12 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

providing for the transport and termination of telecommunications traffic by the incumbent. See 47 C.F.R. § 51.715(a).6
Similarly, the obligation to provide interim transport and ter6

Until recently, 47 C.F.R. § 51.715 provided, in relevant part:
(a) Upon request from a telecommunications carrier without an
existing interconnection arrangement with an incumbent LEC,
the incumbent LEC shall provide transport and termination of
telecommunications traffic immediately under an interim
arrangement, pending resolution of negotiation or arbitration
regarding transport and termination rates and approval of such
rates by a state commission under sections 251 and 252 of the
Act.
(1) This requirement shall not apply when the requesting carrier has an existing interconnection arrangement that provides
for the transport and termination of telecommunications traffic
by the incumbent LEC.
(2) A telecommunications carrier may take advantage of such
an interim arrangement only after it has requested negotiation
with the incumbent LEC pursuant to § 51.301.
(b) Upon receipt of a request as described in paragraph (a) of this
section, an incumbent LEC must, without unreasonable delay,
establish an interim arrangement for transport and termination of
telecommunications traffic at symmetrical rates.
(1) In a state in which the state commission has established
transport and termination rates based on forward-looking economic cost studies, an incumbent LEC shall use these statedetermined rates as interim transport and termination rates.
(2) In a state in which the state commission has established
transport and termination rates consistent with the default price
ranges and ceilings described in § 51.707, an incumbent LEC
shall use these state-determined rates as interim rates.
(3) In a state in which the state commission has neither established transport and termination rates based on forward-looking
economic cost studies nor established transport and termination
rates consistent with the default price ranges described in
§ 51.707, an incumbent LEC shall set interim transport and termination rates at the default ceilings for end-office switching (0.4
cents per minute of use), tandem switching (0.15 cents per minute
of use), and transport (as described in § 51.707(b)(2)).
47 C.F.R. § 51.715 (2001) (emphasis added). The FCC amended the rule,
effective December 29, 2011. See Establishing Just and Reasonable Rates
for Local Exchange Carriers, 76 Fed. Reg. 73,830, 73,856 (Nov. 29,
2011). Because the amendments do not alter the outcome, we refer to the
regulation as it was in effect when the parties briefed and argued the case.

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 13 of 19

10561

mination of telecommunications traffic at symmetrical rates is
triggered “[u]pon receipt of a request as described in paragraph (a) of this section,” 47 C.F.R. § 51.715(b), which refers
to a “request from a telecommunications carrier without an
existing interconnection arrangement,” 47 C.F.R. § 51.715(a)
(emphasis added). The FCC promulgated this regulation to
accelerate the pace at which new entrants to the local market
could initiate service:
We are concerned that some new entrants that do not
already have interconnection arrangements with
incumbent LECs may face delays in initiating service solely because of the need to negotiate transport
and termination arrangements with the incumbent
LEC. . . . To promote the Act’s goal of rapid competition in the local exchange, we order incumbent
LECs upon request from new entrants to provide
transport and termination of traffic, on an interim
basis, pending resolution of negotiation and arbitration regarding transport and termination prices, and
approval by the state commission. . . . We also conclude that interim prices for transport and termination shall be symmetrical. Because the purpose of
this interim termination requirement is to permit
parties without existing interconnection agreements
to enter the market expeditiously, this requirement
shall not apply with respect to requesting carriers
that have existing interconnection arrangements that
provide for termination of local traffic by the incumbent LEC.
Local Competition Order, 11 FCC Rcd. at 16029, ¶ 1065
(emphasis added).
[4] It is undisputed that at all relevant times, Autotel had
an existing interconnection arrangement with AT&T Nevada
that provided for the transport and termination of local telecommunications traffic. Thus, AT&T Nevada had no obliga-

Case: 10-15663

10562

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 14 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

tion under § 51.715 to establish an interim arrangement with
symmetrical rates.
[5] Autotel also argues that the FCC voided Autotel’s
existing arrangement with AT&T Nevada when it amended
47 C.F.R. § 20.11 to prohibit incumbent LECs from imposing
tariff-based compensation obligations on CMRS providers.
See supra at 10553; Intercarrier Compensation, 70 Fed. Reg.
16,141, 16,141 (Mar. 30, 2005) (prohibiting LECs “from
imposing compensation obligations for non-access traffic pursuant to tariff” and providing that “any existing wireless termination tariffs shall no longer apply upon the effective date
of these amendments to our rules”); 47 C.F.R. § 20.11(d)
(“Local exchange carriers may not impose compensation obligations for traffic not subject to access charges upon commercial mobile radio service providers pursuant to tariffs.”). The
FCC adopted this rule after several CMRS providers argued
that LECs who charged CMRS providers by tariff were effectively bypassing the negotiation and reciprocal compensation
regime contemplated by the 1996 Act and FCC regulations.
See In re Developing a Unified Intercarrier Compensation
Regime (T-Mobile Order), 20 FCC Rcd. 4855, 4855, ¶ 1 (Feb.
24, 2005).
[6] Although the rule change may have prohibited AT&T
Nevada from continuing to charge Autotel tariff-based rates
for transport and termination of local traffic,7 nothing suggests
that it disrupted Autotel’s interconnection with AT&T
Nevada’s network. It appears to be undisputed that even after
the rule’s effective date, Autotel retained its analog interconnection, which continued to provide for the transport and termination of local telecommunications traffic.
Next, Autotel seeks to leverage the fact that in November
2005, AT&T Nevada invoked 47 C.F.R. § 20.11(e) to revive
7

The district court found as much, but this question is not before us on
appeal, and we do not decide it.

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 15 of 19

10563

the parties’ negotiation of an agreement under the 1996 Act.
See supra at 10553-54. Autotel contends that under
§ 20.11(e), when an incumbent LEC initiates negotiations
under the 1996 Act, the interim pricing requirement in
§ 51.715(b) operates independently of § 51.715(a), and
applies even when there is an existing interconnection
arrangement between the parties.
As adopted in March 2005, § 20.11(e) provided,
An incumbent local exchange carrier may request
interconnection from a commercial mobile radio service provider and invoke the negotiation and arbitration procedures contained in section 252 of the Act.
A commercial mobile radio service provider receiving a request for interconnection must negotiate in
good faith and must, if requested, submit to arbitration by the state commission. Once a request for
interconnection is made, the interim transport and
termination pricing described in § 51.715 of this
chapter shall apply.
47 C.F.R. § 20.11(e) (emphasis added).8 Autotel contends that
the italicized sentence refers only to the transport and termination rates described in § 51.715(b)(1)-(3) and does not
incorporate § 51.715(a), which expressly limits the rule’s
application to circumstances in which there is not already an
existing interconnection arrangement. AT&T Nevada, for its
part, argues that § 20.11(e)’s cross-reference to § 51.715
encompasses § 51.715 in its entirety and therefore — like
§ 51.715 — applies only when there is no existing intercon8

The FCC amended § 20.11, effective January 11, 2012. See Developing an Unified Intercarrier Compensation Regime, 77 Fed. Reg. 1,637,
1,640 (Jan. 11, 2012). Because the amendments do not alter the outcome
— if anything, they further undermine Autotel’s argument by eliminating
the final sentence of subparagraph (e) — we refer to the regulation as it
was in effect when the parties briefed and argued the case.

Case: 10-15663

10564

09/04/2012

ID: 8308437

DktEntry: 32-1

Page: 16 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

nection arrangement between the incumbent LEC and the
CMRS provider — essentially creating parallelism between
the two regulations.
That § 20.11(e) refers to “the interim transport and termination pricing described in § 51.715” lends some support to
Autotel’s position. Id. (emphasis added). It is plausible that
this sentence refers only to the rates set forth in § 51.715(b)
for interim transport and termination of telecommunications
traffic, and not to § 51.715(a)’s obligation to provide such
transport and termination in the first place, which, as we
explain above, applies only if the competing carrier does not
have an existing interconnection arrangement. This is, to
some extent, consistent with the FCC’s explanation of the
rule. See Intercarrier Compensation, 70 Fed. Reg. at 16141
(explaining that under § 20.11(e), “during the period of negotiation and arbitration, the parties will be entitled to compensation in accordance with the interim rate provisions set forth
in § 51.715” (emphasis added)).
[7] Nevertheless, considering the applicable regulations
together, we conclude that Autotel has not established that
§ 20.11(e) created an independent pricing obligation. On its
face, § 20.11(e)’s cross-reference cites “§ 51.715 of this chapter” generally, rather than subsection (b) specifically. In addition, § 51.715 is titled “Interim transport and termination
pricing.” Section 20.11(e)’s use of that phrase is thus more
naturally read as a reference to § 51.715 generally, not as an
implied reference to subsection (b) alone. We therefore conclude that § 20.11(e)’s cross-reference incorporates all of
§ 51.715. Autotel’s argument might have traction if Autotel
could show that the interim transport and termination requirement in § 51.715(a) had no relevance or practical application
in the circumstances contemplated by § 20.11(e) — when an
incumbent LEC initiates negotiation of an interconnection
agreement — or that an incumbent LEC would never invoke
§ 20.11(e) to initiate negotiations with a CMRS provider with
whom it did not have an existing interconnection arrange-

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 17 of 19

10565

ment. Autotel has not made this argument, however, and the
record does not appear to support it.
[8] To the contrary, the administrative history of the rule
suggests that the FCC expected incumbent LECs to use
§ 20.11(e) to secure agreements with CMRS providers with
whom they did not previously have interconnection arrangements. In its order announcing the amendments to § 20.11, the
FCC acknowledged that by relying on intermediary networks,
many CMRS providers were able to exchange telecommunications traffic with incumbent LECs without entering into
interconnection agreements or other compensation arrangements with the incumbents. See T-Mobile Order, 20 FCC
Rcd. at 4857, ¶ 5. It recognized that without the ability to
charge by tariff (which the amendments prohibited, see supra
at 10562 (discussing § 20.11(d))), incumbent LECs “may
have . . . difficulty obtaining compensation from CMRS providers” because they could not compel CMRS providers to
negotiate or arbitrate interconnection agreements under the
1996 Act. T-Mobile Order, 20 FCC Rcd. at 4864, ¶ 15. The
FCC promulgated paragraph (e) to remedy this gap in the regulatory regime — it granted to incumbent LECs the same
ability as CMRS providers to compel negotiation and arbitration under § 252 of the 1996 Act. See id. at 4864-65, ¶ 16.
Because negotiations might take several months, the FCC “establish[ed] interim compensation requirements under section
20.11 consistent with those already provided in section
51.715.” Id. at 4865, ¶ 16 (emphasis added). As we explained
above, § 51.715 requires an incumbent to provide an interim
arrangement with symmetrical pricing only to a competing
carrier that does not already have an existing interconnection
arrangement with the incumbent.
The unfairness that Autotel perceives in this regime appears
to have been ameliorated, at least for CMRS providers such
as Autotel, by § 51.717, which long provided for symmetrical
reciprocal compensation during renegotiation of existing

Case: 10-15663

09/04/2012

10566

ID: 8308437

DktEntry: 32-1

Page: 18 of 19

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

arrangements between CMRS providers and incumbent LECs.
Section 51.717 provided,
(a) Any CMRS provider that operates under an
arrangement with an incumbent LEC that was established before August 8, 1996 and that provides for
non-reciprocal compensation for transport and termination of telecommunications traffic is entitled to
renegotiate these arrangements with no termination
liability or other contract penalties.
(b) From the date that a CMRS provider makes a
request under paragraph (a) of this section until a
new agreement has been either arbitrated or negotiated and has been approved by a state commission,
the CMRS provider shall be entitled to assess upon
the incumbent LEC the same rates for the transport
and termination of telecommunications traffic that
the incumbent LEC assesses upon the CMRS provider pursuant to the pre-existing arrangement.
47 C.F.R. § 51.717. In promulgating § 51.717, the FCC determined that CMRS providers operating pursuant to arrangements that predated enactment of the 1996 Act should be
permitted to renegotiate those arrangements under the more
favorable post-1996 Act regime without termination liability
or other contractual penalty. See Local Competition Order, 11
FCC Rcd. at 16044-45, ¶¶ 1094-1095.
Autotel alleged in its complaint that AT&T Nevada “refused to pay reciprocal compensation as required by 47 CFR
51.717(b).” It reiterated this allegation in opposition to summary judgment and in briefing before this court. Autotel did
not, however, assert a claim under § 51.717, and the district
court did not address it. Likewise, on appeal AT&T Nevada
did not respond in briefing or at oral argument to Autotel’s
arguments relating to § 51.717.

Case: 10-15663

09/04/2012

ID: 8308437

DktEntry: 32-1

AUTOTEL v. NEVADA BELL TELEPHONE COMPANY

Page: 19 of 19

10567

Whether relief is available to Autotel under § 51.717 turns
on a number of factual and legal issues that the district court
has not yet addressed. Among other things, we note that the
FCC recently revised the reciprocal pricing regulations at
issue here and eliminated § 51.717 altogether. See Establishing Just and Reasonable Rates for Local Exchange Carriers,
76 Fed. Reg. at 73,856. We leave it to the district court to
consider in the first instance what, if any, impact these
changes have on any claim Autotel may have under § 51.717.9
[9] We therefore (1) affirm the district court’s dismissal of
Autotel’s good faith claim; (2) affirm the district court’s
grant of summary judgment on Autotel’s claim under 47
C.F.R. §§ 51.715 and 20.11; and (3) remand to the district
court for the limited purpose of considering whether Autotel
adequately pled a claim for relief under § 51.717 and, if so,
for further proceedings as appropriate.
The parties shall bear their own costs on appeal.
AFFIRMED AND REMANDED.

9

Autotel argues in a single sentence in its opening brief that AT&T
Nevada violated §§ 51.715 and 20.11 by “disconnect[ing] existing interconnection.” This contention appears to refer to AT&T Nevada’s disconnection of a single line that Autotel used to test and administer its switch,
not for subscriber traffic. Although Autotel raised this argument before the
district court, the conclusory statement in its opening brief, unaccompanied by argument or citation to the record, is insufficient to preserve the
issue for appeal, and we do not address it. See Maldonado v. Morales, 556
F.3d 1037, 1048 n.4 (9th Cir. 2009) (“Arguments made in passing and
inadequately briefed are waived.”); Retlaw Broad. Co. v. NLRB, 53 F.3d
1002, 1005 n.1 (9th Cir. 1995) (“Although the issue . . . is summarily mentioned in [appellant’s] opening brief, it has not been fully briefed, and we
therefore decline to address it.”).