United States District Court, D. Colorado
TELIAX, INC. d/b/a Teliax Colorado, LLC, Plaintiff/Counter-Defendant,
AT&T CORP., Counter-Plaintiff/Defendant.
Brooke Jackson, United States District Judge.
November 1, 2016 the Court granted plaintiff Teliax,
Inc.'s (“Teliax”) motion for summary judgment
on defendant AT&T Corporation's
(“AT&T”) counterclaims against it. ECF No.
73. Although Teliax did not move for summary judgment on its
own claims at that time, the parties subsequently agreed that
the Court's order effectively resolved those claims in
Teliax's favor. ECF No. 75 at ¶2. The parties
thereafter sought to vacate their trial date and prepared to
stipulate to the entry of final judgment in Teliax's
favor. Id. However, before they could do so the D.C.
Circuit issued an opinion vacating a Federal Communication
Commission (“FCC”) decision I relied on heavily
in reaching that decision. See AT&T Corp. v.
FCC, 841 F.3d 1047, 1049 (D.C. Cir. 2016) (vacating
In re Connect America Fund, 30 FCC Rcd. 1587 (2015)
(hereinafter the “CAF Order”)).
Accordingly, AT&T now contends that the Court should
vacate that prior order and enter summary judgment in its
favor instead. ECF No. 78. For the reasons below, however, I
find that while vacating my prior order makes sense in light
of the D.C. Circuit's decision, this case should be
referred to the FCC rather than decided summarily in
of background, this case involves a billing dispute between
Teliax-a company routing toll-free 1-800 or “8YY”
calls in Colorado-and AT&T-a corporation servicing many
of those Colorado-based 8YY customers. ECF No. 73 at 1. The
dispute arose after AT&T refused to pay Teliax certain
“end-office switching” charges because of its
belief that the services Teliax provided to it did not
constitute end-office switching. Id. An end-office
switching service typically consists of the physical
last-mile transmission of a call via an actual physical
facility. Id. at 10. Routing over-the-top Voice of
Internet Protocol (“VoIP”) traffic- i.e., calls
made over the internet-Teliax did not in fact provide those
Teliax successfully argued that it was entitled to charge for
them. Teliax's Tariff-i.e., its “contract”
with AT&T-incorporated what was known as the VoIP
Symmetry Rule or “VSR.” The VSR, which the FCC
passed in 2011, allows over-the-top VoIP providers and local
exchange carriers (“LEC”) such as Teliax to
potentially charge “end-office switching charges”
for providing the “functional equivalent” of
end-office switching services. CAF Order at *2;
see 47 C.F.R. §§ 51.903 and 51.913;
see also In Re Connect America Fund, 26 FCC Rcd.
17663 (2011) (adopting those regulations). What's more,
in the CAF Order decided four years later the FCC
clarified that the services LECs like Teliax provided did in
fact constitute the “functional equivalent” of
end-office switching services. See CAF Order at *6.
Thus, I granted summary judgment in Teliax's favor.
November 18, 2016 in a case challenging the FCC's latter
decision, however, the D.C. Circuit held that the FCC had not
explained what the phrase “functionally
equivalent” meant “with the requisite clarity to
enable [the court] to sustain [the] conclusion” that
the services LECs like Teliax provide are the
“functional equivalent” of end-office switching.
AT&T, 841 F.3d at 1049. Accordingly, the D.C.
Circuit vacated the CAF Order and remanded to the
Commission the issue of what services, if any, provided by
over-the-top VoIP-LEC providers constitute the
“functional equivalent” of end-office
AT&T correctly points out, this remand of the
CAF Order effectively undermines my finding that the
routing services Teliax provided to AT&T in this case
constituted the functional equivalent of end-offices
switching. See ECF No. 73 at 12 (“[B]ecause I
conclude that the FCC made it clear in its 2015 clarification
of that rule that the services CLECs like Teliax provide are
the ‘functional equivalent of end-office switching[,
]' see CAF Order, at *11, I find that Teliax
lawfully billed AT&T for these end user service charges,
and that AT&T cannot now dispute those bills.”).
For that reason, the summary judgment I entered in
Teliax's favor in this billing dispute must be
because the D.C. Circuit remanded to the FCC for further
clarification this issue of what “functional
equivalence” lawfully means, the opposite conclusions
AT&T wants me to reach-i.e., that Teliax's services
do not constitute the functional equivalent of
end-office switching as a matter of law and that AT&T is
therefore entitled to summary judgment in its favor-are not
necessarily borne out either. In other words, even though the
D.C. Circuit expressed in dicta its skepticism that
over-the-top VoIP providers and LECs could lawfully charge
for end-office switching-and, therefore, whether the VSR
itself was valid, see AT&T Corp., 841 F.3d at
1054-56-the issue of whether any services companies like
Teliax provide constitute the “functional
equivalent” of end-office switching remains an issue
the FCC is currently grappling with. Accordingly, because
this is an undecided matter that the administrative agency
tasked with clarifying this regulatory issue is currently
deciding, I agree with AT&T's alternative argument
that if summary judgment in its favor is not warranted that a
referral of this case to the FCC under the doctrine of
“primary jurisdiction” is the next best step.
doctrine of primary jurisdiction allows a federal court to
refer a matter extending beyond the ‘conventional
experiences of judges' or ‘falling within the realm
of administrative discretion' to an administrative agency
with more specialized experience, expertise, and
insight.” Williams Pipe Line Co. v. Empire Gas
Corp., 76 F.3d 1491, 1496 (10th Cir. 1996) (quoting
Nat'l Commc'ns Ass'n, Inc. v. American Tel.
and Tel. Co., 46 F.3d 220, 223 (2d Cir. 1995)).
“Specifically, courts apply primary jurisdiction to
cases involving technical and intricate questions of fact and
policy that Congress has assigned to a specific
agency[.]” Id. (same).
a case-by-case decision, under Tenth Circuit precedent a
court must nevertheless consider three questions before
deciding whether to invoke this doctrine and refer an issue
to the relevant administrative agency. See TON Servs.,
Inc. v. Qwest Corp., 493 F.3d 1225, 1239 (10th Cir.
2007). First, it must decide “whether the issues of
fact in the case . . . are not within the conventional
experience of judges[.]” Id. Second, it must
assess “whether the issues of fact . . . require the
exercise of administrative discretion[.]” Id.
And finally, the court must decide whether the issues
“require uniformity and consistency in the regulation
of the business entrusted to the particular agency.”
answer all three questions in the affirmative. Although it
perhaps goes without saying, judges with no technical
background in telecommunications are ill-prepared when
compared to the FCC to decide what services if any performed
by over-the-top VoIP-LEC providers constitute the
“functional equivalent” of the end-office
switching. Furthermore, it is quite clear that the FCC
desires uniformity with respect to this issue as its previous
attempt to do so through the CAF Order evidences.
Finally, the Tenth Circuit has explained that “when the
regulatory agency has actions pending before it which may
influence the instant litigation, invocation of the doctrine
[of primary jurisdiction] may be appropriate.”
Id. As described above, such is the case here.
those reasons, I find that it is proper to vacate the
Court's prior order granting a summary judgment in
Teliax's favor on AT&T's counterclaims [ECF No.
73] and to refer this case to the FCC for further guidance.
Accordingly, the Court shall stay further proceedings in this
case pending this referral to the FCC.
 Teliax's main argument in
opposition is that because the D.C. Circuit's decision
did not actually vacate the VSR that my decision still
stands. ECF No. 77 at 3-4. However, while I held in my prior
order that Teliax's Tariff validly incorporated the VSR,
I nonetheless concluded that its services constituted the
“functional equivalent” of end-office switching
entitling them to bill for those services per the VSR because
the FCC in the CAF Order had said so. ECF No. 73 at
12. Thus, while the VSR might still stand (for now), there is
no longer any authority to ...