California Judge Wrong to Reject HyperCube’s Case against Level 3, CLEC Says
HyperCube contested as erroneous a state administrative law judge’s proposed decision on its conflict with Level 3 Communications. The challenge came in a Thursday filing by HyperCube to the California Public Utility Commission. In May 2009 the competitive local exchange carrier filed a complaint with the state regulator over what the company alleges to be Level 3’s unlawful refusal to pay about $5.5 million for tariffed access services and late charges levied by HyperCube. The charges arose in connection with Level 3’s provision of toll-free calls that originate and terminate in California. Level 3 has been boycotting the charges for years on grounds that the CLEC illegitimately is inserting itself into Level 3’s business. The proposed decision was issued April 16 (CD Apr 21 p9).
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The judge’s proposed ruling on that matter found for Level 3 across the board. In its latest California filing, HyperCube said the proposed decision “contains errors of law and fact” and offers an alternative reading of the case that HyperCube said can lead only to a conclusion that “Level 3 owes Hypercube for the services and functions performed pursuant to Hypercube’s tariff.” The company urged the commission to grant its motion for summary judgment, issue a new scoping memo and allow supplemental briefing on the issues to be identified in the new scoping memo.
In its latest filing, HyperCube told the state utility commission the judge made “two material legal errors” -- not accepting as true what the company calls the “factual underpinnings” of its complaint and failing to apply the “longstanding” filed tariff doctrine to HyperCube’s intrastate access tariff and work the company performs for Level 3.
Quoting Judge Regina DeAngelis’s proposed decision, HyperCube said the jurist “impermissibly (and wrongly) assumes that `HyperCube alleges that it should be permitted to collect its switched access rate for a function, originating access service, provided by a [wireless] carrier,” HyperCube said. “HyperCube never alleges such a right, and the proposed decision cites nothing in the record to substantiate that characterization of Hypercube’s complaint.” Rather, HyperCube is billing Level 3 for, and wants to be paid for, “the specified tariffed access that Hypercube (and no one else) performs in handling these toll-free calls,” it said. The judge’s alleged misapplication of the standard for a motion to dismiss brought by Level 3 “taints the rest of the proposed decision,” HyperCube said.
The judge also failed to apply the tariff doctrine, which the California commission historically has enforced in regard to intrastate tariffs such as HyperCube invokes, the company said. According to the CLEC, its California switched access tariff clearly describes the component access services it’s billing Level 3 for, along with its rates for those services.
If the commission accepts the proposed decision, the state’s telecom industry will be transformed “radically,” HyperCube said. Other carriers in California, whether CLECs or incumbents, have tariffs “substantially identical” to HyperCube’s, it said. Denying HyperCube payment “would retroactively invalidate Hypercube’s and other carriers’ tariffs, forcing them to provide free access services when they do not directly serve the end user,” the company said. The state commission should do as the FCC does and recognize the existence of “intermediate” or “tandem” carriers.
"HyperCube is throwing a lot out there in terms of law and fact in an effort to support their basic argument. They're trying to find a foothold,” Level 3 Senior Corporate Counsel Greg Rogers told us in an interview. “But by inserting themselves, HyperCube is flouting an FCC order. They are ignoring and violating an FCC order that CLECs may not collect originating access fess on behalf of wireless carriers. Effectively, Judge DeAngelis cut through their argument and said, `You can’t be out there collecting fees for wireless carriers to which they are not entitled and which you are not entitled to collect.'"
HyperCube’s challenge to the proposed decision is “nothing more than a last ditch effort to try to find something that will stick,” Rogers said. “But the judge has it right. They are doing exactly what she says they cannot do -- billing on behalf of wireless carriers.” Both parties had until Tuesday to file reply comments.