AT&T, Sprint Battle in Court Over IP Interconnection

By Josh Long

AT&T Michigan and Sprint are fighting in federal district court over whether AT&T is required under the 1996 Telecommunications Act (Telecom Act) to provide Internet protocol (IP) interconnection.

Sprint Spectrum L.P. argued it would be forced to use costly and inefficient technology without IP interconnection. Last year, the Michigan Public Service Commission (PSC) sided with Sprint, overturning a decision from an arbitration panel, which had found the state regulator should reserve a decision until the Federal Communications Commission acts.

AT&T “must provide, for the facilities and equipment of any requesting telecommunications carrier … IP interconnection, with the local exchange carrier’s network — for the transmission and routing of telephone exchange service and exchange access,” the PSC held in an Dec. 6, 2013, order.

The state commission said it wasn’t required to delay its decision until the FCC acts on whether an interconnection requirement in the Telecom Act extends to IP to IP interconnection.

“Section 251 of the Act is one of the key provisions specifying interconnection requirements,” the PSC quoted the FCC as stating in a 2011 document, “and that its interconnection requirements are technology neutral – they do not vary based on whether one or both of the interconnecting providers is using TDM, IP, or another technology in their underlying networks.”

In an appeal filed with the U.S. District Court for the Western District of Michigan, AT&T is seeking to set aside the state commission’s decision and reform an interconnection agreement with Sprint. The case names as defendants the PSC’s commissioners, John Quackenbush, Greg White and Sally Talberg, in their official capacities.

In a joint statement to the PSC earlier this year, AT&T and Sprint agreed that all traffic exchanged would be in Time Division Multiplexing (TDM) format but the parties could agree to swap IP traffic under a separate contract, AT&T said.

The PSC violated federal law, AT&T argued in its appeal, because it was only authorized to reject the negotiated language under the Telecom Act if it “discriminates against a telecommunications carrier not a party to the agreement” or its implementation “is not consistent with the public interest, convenience, and necessity.” The agreement neither discriminates nor is inconsistent with the public interest, according to AT&T.

Others have filed briefs in the appeal, including CenturyLink, an incumbent local exchange carrier like AT&T, and COMPTEL, an association representing competitive carriers that interconnect with ILEC networks.

“IP interconnection is technically feasible today and competitive and incumbent carriers alike recognize that using IP interconnection to exchange carriers’ voice calls is vastly more efficient than interconnection using Time Division Multiplexing … technology,” COMPTEL wrote in an amici curiae brief supporting Sprint. “In particular, IP interconnection allows carriers to connect their networks out for fewer locations than TDM interconnection and thereby substantially reduces network facility costs.”

In the earlier case before the Arbitration Panel, AT&T Michigan said the PSC shouldn’t address the IP interconnection issue because the FCC was considering it and the company doesn’t own an IP switch for AT&T to connect to.

Court records indicate AT&T Michigan owns a softswitch in another state through an affiliate SBC Internet Services. But AT&T said it would need to make substantial modifications to its network in order to accommodate Sprint. Imposing such an obligation on AT&T would violate the Telecom Act’s prohibition against the requirement that a local exchange carrier offer access to a superior network that has not been constructed, AT&T said.

AT&T also argued the PSC is requiring the company to bear costs and provide interconnection at rates that violate federal law.

In a court filing in support of AT&T, CenturyLink reportedly said there is no concern today as there was 18 years ago that competitive carriers will be unable to interconnect with a local exchange carrier.

COMPTEL rejected that argument. Local phone companies are replacing TDM technology with IP, and AT&T has asked the FCC to eventually release incumbents from the obligation to maintain legacy networks, the trade association said.

With droves of customers abandoning legacy phone service in favor of such alternatives as mobile and voice over IP, maintaining a traditional network is expensive, AT&T has told the FCC. The number of switched access lines has plummeted from around 200 million at the turn of the millennium, to 96 million, while the number of VoIP lines has surged 80 percent since 2008, to 42 million, FCC Commissioner Jessica Rosenworcel said earlier this year.

With TDM switching on the decline, the FCC has requested that local phone companies negotiate IP interconnection agreements in good faith, according to the PSC. All such agreements must be filed with a state commission for approval, COMPTEL said.

AT&T’s appeal is before Chief Judge Paul Maloney, case 1:14-cv-00416-PLM.