It has been a while since we updated the status of the landmark interconnection agreement between AT&T and Sprint Spectrum (Sprint) in Michigan. What made this agreement so noteworthy was the fact that on December 6, 2013, the Michigan Public Service Commission (MPSC) reversed an arbitration panel and required AT&T to interconnect with Sprint on an Internet Protocol (IP) level as required by sections 251 and 252 of the 1996 Telecommunications Act.

The decision continues to be significant because even now, almost nine months later, the FCC has continued to duck the contentious issue of IP interconnection. CLECs have repeatedly requested the Commission to find that IP interconnection for voice services is governed by sections 251 and 252 of the Act. Without such a requirement, they assert that ILECs would leverage their market power in interconnection negotiations to impose unfair charges on smaller carriers to complete calls and put them at a competitive disadvantage. 

ILECs have continued to make the case that IP interconnection is occurring quickly, fairly and effectively without FCC intervention and, therefore, carriers should continue to be permitted to negotiate private contracts to interconnect and exchange IP traffic.

When we last left this dispute, AT&T and Sprint filed a Joint Submission to the MPSC seeking approval of their interconnection agreement after the MPSC’s decision. Surprisingly, the companies did not include their IP interconnection rates, terms and conditions as was expected.  Instead, they stated that they had agreed to a “contingency resolution” that would involve a separate agreement for interconnection. That agreement, in fact, provided only for Time Division Multiplexed (TDM) and not IP-level interconnection.  AT&T defended this “resolution” of the dispute, claiming that the parties are entitled to settle the interconnection issue between them despite the MPSC’s Order.  

However, on March 18, 2014, the MPSC rejected the negotiated settlement and ordered AT&T and Sprint to submit an IP-to-IP interconnection agreement by April 1, 2014.

They complied, submitting another joint agreement ib April 1, 2014 reinserting the original IP interconnection language originally approved by the MPSC. 

But AT&T was not satisfied, and on April 8, 2014, it filed a Brief opposing the IP language. Nevertheless, the new interconnection agreement was approved on April 15, 2014 by the MPSC. Moreover, clearly miffed, the Michigan Commission also told AT&T that its Brief would not be part of the case record.

The rules for IP interconnection are obviously very important to AT&T. Thus, the carrier decided to pursue the matter further in the courts. Thus, AT&T filed a complaint with the United States District Court of Western Michigan on April 15, 2014. The complaint alleged that the MPSC acted unlawfully because it:

• Rejected the original agreement between AT&T and Sprint that mandated TDM interconnection only;
• Ordered the carriers to insert IP interconnection into the agreement;
• Ordered requirements as part of the IP interconnection that go beyond section 252 of the FCC’s rules.  These include requiring AT&T to build a new “superior” network for interconnection and making AT&T pay the costs of converting TDM traffic to IP format and vice versa;
• Required cost-based TELRIC pricing for non-interconnection traffic that transverses AT&T’s Michigan switches, such as backhaul. Normally, TELRIC rates apply only for interconnection and the exchange of traffic between carrier end users;
• Required AT&T to pay half the interconnection costs for facilities Sprint obtains from AT&T;
• Refused to enter AT&T’s Brief into the case record.

AT&T asks the Court to find that these actions of the MPSC violate Federal law and should be reversed. It requests the Court to order the MPSC not to enforce the IP interconnection agreement.

CLECs also know the importance of this case to the future of IP regulation. That is why on August 15, 2014, CompTel along with the Midwest Association of Competitive Carriers filed a Brief in support of the MPSC. The carriers argue:

In this case, the MPSC correctly recognized that the plain terms of Section 251(c)(2) are technology neutral and therefore require incumbent LECs to provide IP interconnection. The Commission’s decision will promote competition and enable competitive telecommunications carriers to leverage the efficiencies of IP interconnection to the benefit of Michigan consumers and businesses in at least two ways. Competitive telecommunications carriers will be able to negotiate and enter into agreements with AT&T or another incumbent LEC to obtain IP interconnection on “just, reasonable, and nondiscriminatory” terms and conditions pursuant to Section 251(c)(2).  47 U.S.C. § 251(c)(2)(D).  (See Brief, p. 2.)

While it will be interesting to see how this Court decides this issue, the loser will surely appeal the decision to a federal appeals court. However, we strongly believe that IP interconnection should never be left to the courts. 

Once again, the vacuum created by the FCC’s inaction on this issue has left the industry in a precarious position – attempting a technology transition without a roadmap. Perhaps the only ones who should be happy are the lawyers who will have plenty of work from the legal morass the FCC is letting develop.

By Andrew Regitsky, President, Regitsky & Associates