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PA Bulletin, Doc. No. 97-2109



Petition for Declaratory Order of TCG Delaware Valley, Inc. for Clarification of Section 5.7.2 of its Interconnection Agreement with Bell Atlantic--Pennsylvania, Inc.; P-00971256

[27 Pa.B. 6885]

Public Meeting held
December 4, 1997

Commissioners present:  John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson; John Hanger; David W. Rolka, statement follows; Nora Mead Brownell

Opinion and Order

   Before the Commission for consideration is the Petition for Declaratory Order of TCG Delaware Valley, Inc. (TCG or Petitioner) for Clarification of section 5.7.2 of its Interconnection Agreement with Bell Atlantic-Pennsylvania, Inc. (Bell). Teleport Communications Group, Inc., on behalf of its affiliates, TCG Delaware Valley, Inc. and TCG Pittsburgh, Inc., is hereby requesting that this Commission issue a Declaratory Order under the Commission's Rules of Administrative Practice at 52 Pa. Code § 5.42. Petitioner requests that, under section 5.42 the Commission has authority to issue a Declaratory Order. Petitioner avers that the Commission's rules permit a party to request a declaratory ruling ''to terminate a controversy or remove uncertainty.''

   Here TCG seeks a Declaratory Ruling regarding the Commission's Order at Docket No. A-310258F0002, which approved the Interconnection Agreement between the former Eastern Telelogic Corporation (now TCG Delaware, Inc.) and Bell.

History of the Proceeding

   On September 19, 1997, TCG filed its Petition, enforcing section 5.7.2 of the Bell Atlantic-Pennsylvania, Inc.--TCG Delaware Interconnection Agreement. On October 1, 1997, TCG Delaware, Inc. filed an Amended Petition for Declaratory Order enforcing section 5.7.2 of the Agreement.

   On October 22, 1997, Bell filed an Answer to and Motion to Dismiss the Amended Petition of TCG. On November 7, 1997, TCG filed a Motion for Extension of Time to File Answer to Motion to Dismiss and an Answer to the Motion to Dismiss. On November 14, 1997, PECO Hyperion Telecommunications, Hyperion Telecommunications of Harrisburg, Inc., and Hyperion Telecommunications of Pennsylvania, Inc. (collectively, Hyperion) filed a Petition to Intervene in this proceeding.


   Under normal circumstances we would dispose of each pleading on the merits. However, in this instant proceeding, we conclude that it is in the interest of administrative economy to hold these pleadings in abeyance pending the publication in the Pennsylvania Bulletin and the receipt of and consideration of comments filed with respect to the issues delineated herein.

   Section 5.7.2 of the above referenced Interconnection Agreement pertains to the definition of local traffic. Petitioner argues that the traffic from a Bell end user to an Internet Service Provider should be considered local traffic and, consequently, Bell should pay reciprocal compensation to TCG for the termination of this traffic. Bell argues that this traffic is jurisdictionally interstate and, therefore, need not be considered for reciprocal compensation payments. The Association for Local Telecommunications Services has recently raised this issue before the Federal Communications Commission (FCC) and has asked for a determination that the classification of Internet traffic be determined as local traffic.1 FCC Public Notices, DA No. 97-1543, July 2, and July 23, 1997. This issue is ripe for consideration at the FCC level.

   TCG argues, however, that this Commission need not await the FCC's resolution of the issue. Petitioner states that the question is a state specific issue to determine the appropriateness of the Interconnection Agreements and further argues that the Eighth Circuit Court has buttressed this finding by its holding that it is the state jurisdiction that has the responsibility to resolve issues in controversy in an Interconnection Agreement. Iowa Utilities Board v. FCC 120 F.3rd 753(8th Cir. 1997)

   We have reviewed the entire record in this proceeding and find that the issue on whether Internet traffic should be classified as local traffic, subject to reciprocal compensation, is of grave importance to the public interest. Therefore, we shall publish this Opinion and Order in the Pennsylvania Bulletin for public comment. We shall solicit comments on the following questions:

   1.  Whether and why calls placed to a local number of an Internet service provider should be treated differently from local voice grade service to other numbers, generally?

   2.  What are the specific characteristics of Internet calling and the unique costs associated with originating and terminating such traffic?


   We find that the Petition of TCG presents a question of broad public interest, the resolution of which will impact on the development of local exchange service competition. Because of the extreme growth of the usage of the Internet, we find that publication of this Order for further comment of all interested parties has been necessitated. The Staff upon review of the comments is directed to make a final recommendation on this issue to the Commission on or before the first Public Meeting in May, 1998. .

Therefore; It Is Ordered That:

   1.  The Petition for Declaratory Order filed by TCG Delaware Valley, Inc., is held in abeyance pending review of and consideration of further comments on this matter.

   2.  All pleadings filed by the parties in relation to the above referenced pleading are also held in abeyance pending review of and consideration of further comments on this matter.

   3.  This Order shall be published in the Pennsylvania Bulletin for the purpose of collecting more public information through the solicitation of comments concerning the issue of the appropriate classification of Internet traffic.

   4.  The Secretary shall duly certify this order and deposit it with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.

   5.  Within 20 days of this order's publication in the Pennsylvania Bulletin, an original and 10 copies of any comments concerning this Opinion and Order should be submitted to the Pennsylvania Public Utility Commission at Docket No. P-00971256. The contact person is Gary C. Wagner, Rate Case Review Specialist, Office of Special Assistants, at (717) 783-6175.

   6.  The Staff is directed to make a final recommendation to the Commission after review of the comments on or before the first Public Meeting in May, 1998.

   7.  The Commission shall make a final adjudication after review of the Staff's recommendations.


Statement of Commissioner David W. Rolka

   When we were developing appropriate guidance for resolution of mediation and arbitration of interconnection agreements, Bell Atlantic opposed pleas from potential competitors for ''Bill and Keep'' arrangements where each local provider keeps all the revenue on a local call rather than providing compensation for termination of the local call to the terminating local carrier.

   The Petition for Declaratory Order seeks a determination of whether calls to Internet Service Providers (ISPs) are local calls. These calls are treated as local in separations reports, ARMIS reports, rate filings with the FCC, and interconnection/compensation agreements with neighboring incumbent telephone companies.

   I therefore request that comments address what appears to be a potential for inconsistent treatment and/or arbitrage if these calls are not determined to be local.

1 Letter from ALTS to Regina M. Keeney, June 20, 1997, filed in CC Docket No. 9698, at 1. The ALTS letter defines ISP traffic as traffic originated by end-users on one network that is destined for the Internet via ISPs connected to the other carrier's network.

[Pa.B. Doc. No. 97-2109. Filed for public inspection December 26, 1997, 9:00 a.m.]

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