DATE:	July 1, 2009
TO:	Office of Commission Clerk (Cole)
FROM:	Office of the General Counsel (Murphy) Division of Regulatory Compliance (King)
RE:	Docket No. 080631-TP – Petition for Commission to intervene, investigate and mediate dispute between DSL Internet Corporation d/b/a DSLi and BellSouth Telecommunications, Inc.
AGENDA:	07/14/09 – Regular Agenda – Partial Motion to Dismiss – Oral Argument Not Requested
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Skop
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\GCL\WP\080631.RCM.DOC

 

Case Background

On October 9, 2008, DSL Internet Corporation (“DSLi”) filed its Petition for the Florida Public Service Commission (“Commission”) to Intervene, Investigate and Mediate (“Petition”)[1] in which DSLi asks the Commission to enjoin BellSouth Telecommunications, Inc. [d/b/a AT&T Florida] (“AT&T”)  from suspending the services of DSLi, to deny AT&T the true-up of rates, and to provide “any such other and further relief as the Commission deems necessary to protect the Florida consumer.”

            On November 3, 2008, AT&T filed its Partial Motion to Dismiss and Answer and Affirmative Defenses to DSLi’s Petition (“Partial Motion to Dismiss”).  DSLi did not file a response to the AT&T Partial Motion to Dismiss.

 

The parties have been in settlement negotiations since October 2008.  Staff held a conference call with the parties on October 14, 2008, and has received periodic updates on the negotiations since that time.  On May 7, 2009, AT&T sent DSLi a confidential settlement offer. On June 9, 2009, AT&T notified the Commission staff that DSLi had not responded to its May 7, 2009, settlement offer and that AT&T would begin collection procedures.  On June 10, 2009, staff requested an update from the parties on the status of settlement negotiations.  AT&T reiterated its June 9, 2009, statements; DSLi reported that it was still evaluating the settlement offer and formulating a counter proposal.

AT&T has asked that the Commission move forward to address the outstanding Partial Motion to Dismiss.  Although the parties still appear to be talking, in light of AT&T’s notice that it intends to begin collection procedures, staff believes that the Commission should issue a ruling on the AT&T Partial Motion to Dismiss, which addresses the Commission’s authority to provide the injunctive relief requested by DSLi. 

            This recommendation addresses only the AT&T Partial Motion to Dismiss; unless resolved by the parties, the underlying dispute may need to be scheduled for hearing.

 

            The Commission has jurisdiction over interconnection agreements pursuant to Sections 120.80(13)(d), 364.012(2), and 364.012(13), Florida Statutes.   

 

Discussion of Issues

Issue 1: 

 Should the Commission grant AT&T’s Partial Motion to Dismiss?

Recommendation: 

 Yes.  The Commission should grant AT&T’s Partial Motion to Dismiss.  (Murphy)

Staff Analysis: 

DSLi Petition

           

DSLi presents the following as facts: 

·        DSLi is a competitive local exchange company; 

·        on February 12, 2007, DSLi and AT&T executed an interconnection agreement (“ICA”) that was prepared by AT&T; 

·        on May 28, 2008, AT&T sent DSLi an invoice for $188,820.59 for “true‑ups” to special access rates going back to March of 2005;

·        on July 17, 2008, DSLi submitted a dispute of the true-ups to AT&T;

·        on September 26, 2008, DSLi submitted another dispute of the true-ups to AT&T;

·        on September 26, 2008, AT&T rejected DSLi’s dispute without discussion; and,

·        on October 7, 2008, AT&T advised DSLi that if payment was not received by October 8, 2008, AT&T would suspend service to DSLi. 

            DSLi contends that the ICA carefully lays out the billing, dispute resolution, and true-up procedures the parties must follow.  Specifically, DSLi argues that Section 28 of the ICA titled “Rate True-Up” requires, in pertinent part, that rates be trued-up, based upon final prices determined either by agreement between the parties, or by a final and effective order of the Commission.  If a Commission order is the basis of a true-up, it must be based upon cost studies submitted by either or both parties and shall be binding upon AT&T and DSLi specifically, or upon all carriers generally (such as a generic cost proceeding).  DSLi argues that the parties have not agreed to any amounts nor has DSLi had the opportunity to submit or review any cost studies as they believe the agreement requires.  DSLi also argues that the general billing and collection procedures section of the ICA does not apply to rate true-ups. 

 

As a remedy, DSLi asks the Commission to

·        enjoin AT&T from suspending the services of DSLi, to deny the AT&T true-up of rates requested against DSLi, and to provide “any such other and further relief as the Commission deems necessary to protect the Florida consumer.”

AT&T Partial Motion to Dismiss

Relying on Varnes v. Dawkins, 624 So. 2d 349 (Fla. 1^st DCA 1993) and various Commission orders, AT&T sets forth the standard for a motion to dismiss as follows:  a motion to dismiss questions whether the complaint alleges sufficient facts to state a cause of action as a matter of law; in disposing of a motion to dismiss, the Commission must assume all of the allegations in the complaint as true; and, to sustain a motion to dismiss, the moving party must demonstrate that, accepting all allegations in the petition as correct, the petition still fails to state a cause of action for which relief can be granted.  

AT&T asserts that the Commission cannot grant DSLi’s request for the Commission to enjoin AT&T from suspending the services of DSLi for the following reasons: the Commission has only powers granted by the Legislature and has no common law or inherent powers;[2] any authority granted by necessary implication must be derived from fair implication and intent incident to any express authority;[3] and, any reasonable doubt as to the existence of a particular power of the Commission must be resolved against it.[4]

AT&T then quotes Commission orders acknowledging the Commission’s lack of authority to issue injunctions.  AT&T concludes that “[b]ecause DSLi’s Petition seeks a remedy that the Commission has no authority to provide, the portion of the Petition seeking injunctive relief should be dismissed.”  AT&T asks that the Commission enter an order denying DSLi the relief sought.

Conclusion

AT&T has provided citations to several cases in which the Commission has acknowledged its lack of authority to provide injunctive relief.[5]  Having reviewed the referenced Commission orders, and judicial opinion, staff believes that the Commission does not have the authority to provide injunctive relief to DSLi.  Thus, assuming all of DSLi’s allegations as true, staff recommends that DSLi has failed to state a cause of action for which injunctive relief can be granted by the Commission.  As such, staff recommends that the Commission grant the AT&T Partial Motion to Dismiss and thereby dismiss the portion of the Petition in which DSLi requests injunctive relief.  Staff recommends that the remainder of the DSLi Petition should not be dismissed.

 

 

 

Issue 2: 

 Should this docket be closed?

Recommendation: 

 No.  This docket should not be closed. (Murphy)

Staff Analysis: 

 Although staff has recommended that the Commission does not have authority  to provide injunctive relief, staff recommends that the docket remain open to address the substantive issues raised in the DSLi Petition over which the Commission has jurisdiction.