[00:00:00] Speaker 00:
Case number 15-1059, AT&T Corp.

[00:00:04] Speaker 00:
Petitioner versus Federal Communications Commission at L. Ms.

[00:00:07] Speaker 00:
Segarra for the petitioner, Ms.

[00:00:08] Speaker 00:
Citrin for the respondent, and Mr. Wright for the interveners.

[00:01:19] Speaker 06:
Thank you, Your Honor.

[00:01:20] Speaker 02:
Good morning.

[00:01:21] Speaker 06:
Good morning, Your Honor.

[00:01:22] Speaker 06:
May it please the Court, Joe Guerra for AT&T Corporation.

[00:01:25] Speaker 06:
I'd like to reserve five minutes of my time for rebuttal.

[00:01:28] Speaker 06:
As the two dissenting commissioners recognized, the order under review altered the clear meaning of the VoIP symmetry rule without going through notice and comment rulemaking.

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On three prior occasions, the Commission made clear that in VoIP over-the-top services, neither ELEC nor its VoIP partner provides the essential end-office switching function of taking a call off a high-capacity trunk and connecting it physically to the line that serves the call-in party.

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Yet when parties other than Wimax Corporation argued to the Commission

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that dumping calls onto the Internet thousands of miles away from the call-in party constitutes the functional equivalent of end office switching, the Commission abruptly changed course and pretended it had never previously addressed the question.

[00:02:15] Speaker 02:
So let me ask you, in the transformation order,

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The commission begins today, the commission comprehensively reforms and modernizes the universal service and intercarrier compensation system to ensure, et cetera.

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And then it addresses these issues, why it's changing its position, what it's doing, and in paragraph 970 addresses some of these issues that are

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So why isn't that a signal to everybody?

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Notice and comment that the commission's off on a new path, regardless of what it's done in the past.

[00:02:55] Speaker 06:
Your Honor, our argument is that the transformation order set the meaning of the VoIP symmetry rule and made clear, for reasons I'd like to explain in greater detail, that there is no end-off, no functional equivalent of end-off as switching in a VoIP over-the-top phone call, and it's the declaratory order that changed the path that the commission was on.

[00:03:15] Speaker 02:
So what do you do with paragraph 970?

[00:03:18] Speaker 02:
All right.

[00:03:26] Speaker 02:
Where the commission says, regardless of whether the functions performed or the technology used correspond precisely to those used under a traditional TDM architecture.

[00:03:38] Speaker 02:
Isn't that saying no, your honor.

[00:03:40] Speaker 02:
No.

[00:03:40] Speaker 02:
All right.

[00:03:40] Speaker 02:
Why not?

[00:03:41] Speaker 06:
So if I could back up a moment, your honor.

[00:03:44] Speaker 06:
Um, first of all, if I could, it might be helpful if I just explain how an over the top call works.

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If you have Vonage as your over the top provider and you're here in Washington, DC,

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And a friend of yours calls you from Los Angeles.

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They dial your number.

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The phone system recognizes long-distance call and who the LEC assigned to that call is, and they transfer it to, say, San Francisco.

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At that point, the LEC that's partnering with Vonage and Vonage, one or the other,

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takes the call at a media gateway, converts it to an IP format, puts an IP address on it, and puts it on the Internet.

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And all the routing that is done at that point is like putting a letter, an address on the letter.

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Then the call is sent on its way over the Internet until it gets to the broadband provider that is serving you.

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And at that place, the broadband provider takes the call off of the high-capacity trunk and switches it directly onto a line that's serving you.

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Our position is that function, what the ISP is doing, is the end office switching.

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But the problem here is that in an over-the-top setting,

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The party that's actually doing that work of switching the call onto the line isn't the one that's getting paid for it.

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The interveners and the FCC have said that the person who just put the call on the Internet back in San Francisco gets to treat itself as though it's the person that took the call off the big trunk and put it on the line that runs to your home.

[00:05:15] Speaker 04:
And so the functional... I just want to try... To be honest, I don't understand the Commission's...

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explanation because maybe you can help me on it.

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It seems to me at least one reading of the declaratory order is the key aspect or at least a key aspect of what an end-office switch does is to direct this call to the called party.

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It makes a critical step of that.

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putting an IP address on this phone call, which emerges addressed to a regular phone number, is the equivalent of that.

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And it's done much more simply, much less technology, much less cost, but it is the equivalent of at least a function.

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And I guess they're saying a critical function of the end office switch.

[00:06:24] Speaker 06:
Yes, Your Honor, but our point is that that is in fact not the critical function of an end office switch.

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And so if I could just describe the WiMAX decision briefly.

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WiMAX did what I just described as over the top.

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It just puts the address on as you described, puts it on the Internet, other people take care of making the call show up at your house.

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WIMAC said, we provide end office switching under the traditional definition of that term.

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And the commission said, end office switching requires, and they also said a virtual connection through the network is good enough to be a local loop.

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and that we provide the functional equivalent of end office switching because connection to a local loop is not the essence of end office switching.

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As I understand the commission's view of YMAX and also the intervener's view, insofar as the commission said those things in the first YMAX order, it was

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that the holding is much narrower.

[00:07:24] Speaker 06:
Your Honor, that is their position, but our... I'm putting this in a traditional classic.

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Our point is that the reasoning that the YMAX decision used necessarily addressed the functional equivalent argument, because what they said was, end office switching requires that you establish the point-to-point connection from the switch to the call-in party.

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The call-in party.

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that's taking the call off the high-capacity trunk and getting it to the call-at-party and they said that is required for end-office switching.

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That means that the essence of end-office switching has to be the physical connection from that high-capacity trunk to the call-at-party.

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It can't be something else.

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And then when you get to the transformation order, as Your Honor noted, the Commission says we've got a functional equivalent standard.

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You don't have to use

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Traditional telephone technology, you can use IP technology if you're performing the same functions.

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But it says, even under this rule, you can't charge unless you or your VoIP partner are performing the functions for which you're charging.

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And it cites to the very discussion I just described in the WiMAX order,

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to illustrate a violation of that rule.

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It says... It is, Your Honor.

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But there's no other reason to be citing it.

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If all WIMAC stood for is a tariff interpretation case, why is the Commission discussing it in illustrating the limits of its functional equivalence test?

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It is, Your Honor.

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In this context, I think CF means that... In any context.

[00:08:56] Speaker 05:
Well, ordinarily... Here, we cite this, and we don't really know why we're citing it, but it's interesting.

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I'd like to... I assume there's a more precise reasoning employed in the CF citation, and here I would say that what's going on as a factual matter is it's a functional equivalence.

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They're necessarily rejecting a functional equivalence argument, but it's CF because it's decided under a different legal regime.

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It's at a time when

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You couldn't actually charge for what your void partner did in any event.

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So it's not on all fours.

[00:09:26] Speaker 05:
One way to read WIMACS is it's simply an example of the filed rate doctrine.

[00:09:34] Speaker 05:
Here's your tariff, and you'd say the situation's changed and technology's overtaking it.

[00:09:41] Speaker 05:
Fine, but until you change the tariff, you can't take advantage of it.

[00:09:45] Speaker 06:
Yes, Your Honor, but the point is that doesn't make sense for why the transformation order would be citing it.

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If that's all it stood for, it has no bearing on what the limits of a functional equivalence test are.

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And in fact, there's, you know, this back and forth about what does CF mean.

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WIMACS itself, within months of that transformation order coming out, came to the commission and said, whoa, you just said, you cited the decision saying that when people read this, the very passage we're talking about, they're going to think we can't charge functional, for access services on a functional equivalent basis because we don't provide the last mile facilities, the facilities that take that

[00:10:27] Speaker 06:
call off the high capacity trunk and switch it onto the line that reaches the called party.

[00:10:33] Speaker 06:
So they read it precisely the way we read it and are reading it because that is what it means and they say, you've got to clarify.

[00:10:40] Speaker 06:
People are going to think that we can't charge, we don't do the functional equivalent.

[00:10:43] Speaker 06:
And the bureaus does not give them that clarification.

[00:10:46] Speaker 06:
So now the Bureau, the Commission comes in and says, oh yeah, but the Bureau was asked a different question.

[00:10:51] Speaker 06:
They were asked the question, what happens, is it enough to just give some of the numbers and perform some portion of the interconnection?

[00:10:58] Speaker 06:
That's a different question.

[00:10:59] Speaker 06:
That's ridiculous, Your Honors.

[00:11:00] Speaker 06:
The whole point of that inquiry was,

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The portion we don't provide is the last mile facility.

[00:11:07] Speaker 06:
Please tell us that doesn't matter."

[00:11:09] Speaker 06:
And the commission refused to give that clarification.

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So if there was any doubt about the logic of YMAX being sited with a CF site in the transformation order, it's eliminated by the clarification ruling.

[00:11:24] Speaker 06:
And that established what we think was clear and just confirms that

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In order to be providing the functional equivalent of end office switching, you have to perform the function of taking a call off a high-capacity trunk and establishing the connection physically to the call party's premises.

[00:11:42] Speaker 06:
That is what uniquely occurs in the end office switch.

[00:11:45] Speaker 06:
It doesn't occur in other switches, and that's one of the logical aspects of the Commission's ruling, is they say call setup and call control and call signaling, those are the essence of end office switching.

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But as we pointed out, and they don't respond to this point,

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All switches use the signaling network, and they are involved in call setup and call teardown.

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So the point, Your Honor, is the transformation order necessarily embodied an understanding of WiMAX that shows that

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The symmetry that you have to have under the symmetry rule is not, is it a VoIP call, and all VoIP calls should get charged that should be allowed to charge the same thing.

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It's what are the functions being performed and are they symmetrical?

[00:12:29] Speaker 06:
And then in facilities-based call where you have Comcast, for example,

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We don't dispute that they are performing the function of an end office switch.

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They take a call that reaches their node, which is based on the IP address, they know it's going to your premises, and they put it, they take it off a high capacity line and they put it on the line that serves you.

[00:12:49] Speaker 06:
So when the commission says AT&T is trying to make it dependent on the type of technology and it has to stay traditional time division multiplexing, that's nonsense.

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We acknowledge that in that very circumstance with Comcast,

[00:13:02] Speaker 06:
where they're using all IP technology, that that is the functional equivalent of end office switching.

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And so, Your Honors, we think that in these circumstances, the Transformation Order read, particularly in conjunction with the Clarification Order, established a legislative rule, and the Commission was not at liberty to change it without going through notice and comment rulemaking.

[00:13:26] Speaker 02:
So all of this chatter that I was discussing with you earlier is basically irrelevant?

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The Commission's saying, you know, we're changing our whole approach in this area.

[00:13:37] Speaker 06:
Well, in this sense, Your Honor, they're changing their whole approach.

[00:13:40] Speaker 06:
At the front end of the transformation order, they're saying, we're going to stop this whole access regime.

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We think it has a whole bunch of inefficiencies built into it.

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But while it still exists, we're going to let the people who provide

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VoIP calls and perform the same technology as the telephone providers to charge under the access regime when they perform the same functions.

[00:13:59] Speaker 02:
All right.

[00:13:59] Speaker 02:
So in the clarification order, the Commission rejects IMAX's request because it views it as allowing this double billing.

[00:14:07] Speaker 06:
Well, it also refers to charging for functions that you're not performing.

[00:14:11] Speaker 06:
Right.

[00:14:11] Speaker 06:
Which is the core concern that the transformation order identified and cited WIMax as an example of.

[00:14:21] Speaker 02:
All right, so then we get to the declaratory ruling.

[00:14:28] Speaker 02:
And the commission in that seventh footnote says, we interpret the filings we address here to be premised that the LEC is seeking access and office charges

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also assign the calling party telephone number as reflected in the database of the NPAC.

[00:14:59] Speaker 02:
That doesn't respond to your concern?

[00:15:01] Speaker 06:
No, it doesn't respond to our concerns at all, Your Honor.

[00:15:04] Speaker 06:
The argument here is not

[00:15:05] Speaker 06:
YMAX went in and said we should be able to charge because we provide the telephone number and some portion of the interconnection.

[00:15:14] Speaker 06:
And that's, I believe, what they're referring to here.

[00:15:17] Speaker 06:
And they're saying they don't rely on that.

[00:15:20] Speaker 06:
They say call signaling, call control functions are the functional equivalent.

[00:15:25] Speaker 06:
And our point is, again, all the switches do that.

[00:15:29] Speaker 06:
The end office switches function that's unique is it takes this call off the high capacity trunk and switches it onto the individual line.

[00:15:36] Speaker 06:
That is the unique work of an end office switch.

[00:15:40] Speaker 06:
And that has to be the core function that you can be compensated for when you do something equivalent using IP equipment and technology instead of traditional telephone technology.

[00:15:51] Speaker 06:
And we submit that that is what the transformation order cites it for as the proposition of you can charge when you're doing the same functions, but not when neither you nor the LEC is actually performing the function for which you're charging, points to YMAX, an example in which it said you're not providing end-office switching if you don't connect the call to the line that serves the call at party.

[00:16:18] Speaker 06:
Your Honor, I would like to reserve five minutes of my time, but if I could just finish my point about the notice and comment violation.

[00:16:25] Speaker 06:
Because we believe that the transformation order and the clarification order make clear that

[00:16:32] Speaker 06:
The functional equivalent of end office switching was not merely putting a call on the Internet thousands of miles away from the person who's supposed to receive it.

[00:16:41] Speaker 06:
Though when the agency changed its view, it necessarily changed the meaning of a legislative rule.

[00:16:47] Speaker 06:
And the Commission makes the rather extraordinary argument in this case that as long as it doesn't modify the text, it could contradict squarely what was said in the transformation order.

[00:16:57] Speaker 06:
And we submit that this court's precedent foreclosed that claim.

[00:17:00] Speaker 06:
Cases like Appalachian Power, National Family Planning and Reproductive Center, they say if you look at the contemporaneous explication of a rule and you determine its meaning, that is its binding, that's what the legislative rule means, and any subsequent deviation from it is an amendment and therefore must go through notice and comment rulemaking.

[00:17:21] Speaker 06:
If I could reserve the balance of my time, Your Honor.

[00:17:24] Speaker 02:
Yes, and we'll give you that five minutes if you want.

[00:17:27] Speaker 02:
Thank you.

[00:17:27] Speaker 02:
I just want to be clear, though, that in your view, paragraph 970 in the transformation order, that that does not provide an adequate explanation.

[00:17:48] Speaker 06:
Your Honor, I'm not sure I understand.

[00:17:51] Speaker 06:
What do you mean by an adequate explanation?

[00:17:52] Speaker 02:
Well, you're saying, when I originally read this, I thought 970 said, well, we're changing the system.

[00:18:01] Speaker 02:
We're not focusing on these facilities.

[00:18:04] Speaker 02:
We don't care, as it were, about the technology.

[00:18:09] Speaker 02:
So long as the functions performed by it or by its retail

[00:18:16] Speaker 02:
voice over Internet partner, regardless of whether the functions performed in this economy correspond precisely to those used under traditional TDM architecture.

[00:18:27] Speaker 06:
Yes, and it's the next sentence that we are willing to.

[00:18:30] Speaker 06:
However, our rules include measures to protect against double billing, and we also make clear that they do not permit elected charge for functions performed neither by itself or its retail service provider partner, Putno 2028, CF 18 TV YMAX.

[00:18:44] Speaker 06:
Right.

[00:18:45] Speaker 06:
They are using the WiMAX decision to illustrate the limitation on the functional equivalence language that you just quoted.

[00:18:52] Speaker 06:
So they're not saying, it doesn't, what they're saying is as long as you're doing the same thing as a telephone network, we don't care if the technology is different, if the formatting is different, but you can't charge if you're not doing the same thing.

[00:19:07] Speaker 06:
And the thing at issue here is

[00:19:09] Speaker 06:
In an end office switch, the thing is taking it off the high capacity trunk and physically connecting it to the line that reaches the called party.

[00:19:18] Speaker 06:
That doesn't happen in over-the-top.

[00:19:20] Speaker 06:
It does happen in over-the-top.

[00:19:22] Speaker 06:
It's done by the ISP, the broadband provider, who is not getting paid for it, and yet the elect and its over-the-top partner saying, we should collect that money as though they were performing that function.

[00:19:35] Speaker 06:
All right.

[00:19:35] Speaker 06:
Thank you.

[00:19:36] Speaker 06:
Thank you, Your Honor.

[00:19:43] Speaker 01:
May it please the court?

[00:19:44] Speaker 01:
I'm Sarah Citrin representing the FCC.

[00:19:46] Speaker 01:
And what AT&T is doing here is asking the court to read meaning into the VoIP symmetry rule that isn't apparent on the text, but that AT&T infers from outside sources.

[00:19:57] Speaker 01:
And AT&T's interpretation of those sources also asks the court to ignore the text effectively of the commission's decisions and read in meaning.

[00:20:07] Speaker 04:
You would accept the proposition that interpreting

[00:20:10] Speaker 04:
the transformation order, we have to look at the words used in light of the way they've been used elsewhere in the past, elsewhere by the commission, right?

[00:20:23] Speaker 04:
I mean, you talk about going outside the order.

[00:20:25] Speaker 04:
All interpretation of language goes outside the language.

[00:20:30] Speaker 01:
So I think that Judge Rogers is quite right.

[00:20:33] Speaker 01:
The transformation order was an entirely new inter-carrier compensation regime.

[00:20:40] Speaker 04:
And to understand the language, we have to understand the context.

[00:20:45] Speaker 04:
I mean, if you reject that proposition, they were in deep trouble.

[00:20:48] Speaker 01:
No, no.

[00:20:49] Speaker 01:
I accept that when you look at the language, you consider the context.

[00:20:53] Speaker 01:
I guess my response, what I meant to explain was that I think the significant context here is that the Commission was, for the first time, creating an intercarrier compensation access charge regime that would apply to void calls.

[00:21:09] Speaker 01:
It had never done that before.

[00:21:10] Speaker 01:
It had always expressly reserved judgment about whether or how or to what extent

[00:21:15] Speaker 01:
access charges should apply to avoid traffic.

[00:21:18] Speaker 04:
Use terms, including end office switch, and as I understand it, the AT&T says that end office switches perform, let's call them functions, A and B, as well as functions C through E, right?

[00:21:39] Speaker 04:
C through E being functions also performed by tandem switches.

[00:21:44] Speaker 04:
The commission replies to that, saying, yeah, but they perform functions equivalent to C through E, so no problem.

[00:21:53] Speaker 01:
I think AT&T is pointing to the, is focused on how a call is transmitted and it's true, for example, in the WiMAX decision, what the court said there, I'm sorry, what the commission said in that 2011 decision was that because there was a tariff that described a traditional architecture, it looked to the meanings of those terms.

[00:22:15] Speaker 04:
Yes, but the commission went on to say what end office switches do critically.

[00:22:21] Speaker 01:
in a traditional architecture.

[00:22:23] Speaker 01:
And the Commission said, we are not deciding.

[00:22:26] Speaker 01:
AT&T brought claims.

[00:22:27] Speaker 01:
AT&T was arguing to the Commission.

[00:22:29] Speaker 01:
The services that WiMAX is performing are not functionally equivalent to switched access charges.

[00:22:34] Speaker 01:
The Commission dismissed those claims.

[00:22:37] Speaker 04:
It didn't reach them.

[00:22:38] Speaker 01:
It didn't reach them.

[00:22:39] Speaker 01:
It didn't decide them.

[00:22:40] Speaker 04:
And it also didn't decide.

[00:22:43] Speaker 04:
those claims had it gone on to them.

[00:22:46] Speaker 01:
There is talk that AT&T thinks relates to those claims, but I don't think that that, you know, one of you, if you want to call it dictum, that can overcome the express language in

[00:23:02] Speaker 01:
the expressed terms of the order where the commission said, we're not deciding here functional equivalence.

[00:23:08] Speaker 01:
We're also not deciding whether if YMAX had accurately described in its tariff the services it's performing, those services would be the proper subject for access charges.

[00:23:19] Speaker 01:
All we're deciding here is that, kin to the file tariff, Dr. and Judge Randolph, you can only impose charges lawfully for what you have described in your tariff.

[00:23:30] Speaker 04:
It also explained what it perceived to be the function of end office switches.

[00:23:35] Speaker 01:
I think it was explaining what it perceived to be the agency, the industry understanding in a traditional world of what end office switches does, and the Commission doesn't dispute that in a traditional architecture an end office switch, one of its functions is to have this physical connection, but how a call is transmitted

[00:23:56] Speaker 01:
You know, it reads the function out of functional equivalence if how a call is transmitted is more important than what is accomplished by doing that.

[00:24:06] Speaker 01:
The end office switch was responsible for all the call intelligence, for call setup, for managing the call, for knowing when the call ends.

[00:24:14] Speaker 01:
That is the same, those are the same functions that over-the-top VoIP providers perform that facilities.

[00:24:21] Speaker 04:
I don't understand it.

[00:24:24] Speaker 04:
Call setup.

[00:24:25] Speaker 04:
You can have a separate charge for call setup, as well as a charge for an end office switch, which suggests distinct independence of the two functions.

[00:24:41] Speaker 01:
By that logic, there is a separate charge for the transport across the last mile.

[00:24:51] Speaker 01:
which seems to be what AT&T is focused on here.

[00:24:53] Speaker 04:
As counsel points out, in this model, in the order of the top model, that's performed by the ISP.

[00:25:02] Speaker 01:
The transport is performed by the ISP, but I thought, actually, AT&T concedes that all of the call intelligence, all of the delivery, I think he said, the call is, everything necessary for delivery is accomplished before it reaches the ISP, and that's exactly right.

[00:25:22] Speaker 01:
A competitive carrier, the AT&T is focused on its brief on the plan necessary to accomplish certain things, but as the Commission explained it, paragraph 31 of the declaratory ruling

[00:25:35] Speaker 01:
And I think that paragraph 29 through 31 are really important for the court as far as how the commission understood the facts of what these different services accomplish.

[00:25:47] Speaker 01:
But a competitive carrier uses the same switching plant to perform all of the same functions when it's doing facility space, VoIP, or over-the-top VoIP, or even traditional VoIP.

[00:25:59] Speaker 01:
So there is a difference in how

[00:26:03] Speaker 01:
a call moves across the network in these different technologies.

[00:26:08] Speaker 01:
And in a traditional architecture, there was a physical link required, but that isn't the essence of the functions of end office switching.

[00:26:17] Speaker 01:
There was discussion also about paragraph 970, so I want to make sure that

[00:26:21] Speaker 02:
all right but i want to be clear i understand the emphasis on paragraph thirty one and you're saying in addition we need to focus on something to thirty nine twenty i'm sorry twenty nine thirty one that's where the commission is explaining what it understands

[00:26:43] Speaker 01:
the functions that over-the-top void providers provide and why there's no meaningful difference, that the only difference relates to transmission, the control of this end office line, and that that is something I think I mentioned, the carrier common line charge.

[00:26:58] Speaker 01:
At footnote 112, that's what the commission is explaining.

[00:27:02] Speaker 01:
There's a separate charge for that transmission, but switching is these call intelligence functions, and that happens.

[00:27:09] Speaker 01:
The over-the-top VoIP provider and competitive carrier partner provide all of those functions, not just some portion of them, the same way that a traditional

[00:27:19] Speaker 01:
would happen in a traditional architecture.

[00:27:21] Speaker 01:
And with respect to the language about the limitation that AT&T focuses on and that is discussed at paragraph 970 of the transformation order and also in the bureau clarification order, I think all

[00:27:36] Speaker 01:
both the Bureau of Clarification Order in Paragraph 970, Footnote 2028, all of those track the language of the order and are accomplishing the same thing, which is they are in the face of this new framework that for the first time lets competitive carriers charge for some functions that they don't perform because their void partners perform those functions.

[00:27:58] Speaker 01:
The Commission is merely saying in making that change,

[00:28:02] Speaker 01:
We're not inviting double billing, the kinds of double billing problems that had been a problem in the past.

[00:28:07] Speaker 01:
You can't provide just some portion of an incumbent's full access services and charge the full benchmark rate for those services.

[00:28:17] Speaker 01:
Because if you did that, multiple carriers could charge the full rate for the same call.

[00:28:23] Speaker 01:
And at Footnote 2028,

[00:28:26] Speaker 01:
There's the site to WiMAX, which I think illustrates one form of that kind of double billing protection, but they're also, the string site goes on to site level 3's comments, and if you look, especially at paragraph 23,

[00:28:43] Speaker 01:
three of level three's PN comments, which I believe are at 928 of the joint appendix.

[00:28:55] Speaker 01:
Level three is explaining that its position is that

[00:28:59] Speaker 01:
The new inner carrier access charge regime should apply to over-the-top calls as well as facilities-based calls, but there needn't be any concern that if the commission adopts a rule that has that scope, that there will be any problem with double billing, because you can maintain the same requirement that the partnership this time, instead of just the carrier alone in the old regime, can only charge for the functions that they perform.

[00:29:29] Speaker 01:
and they can't provide charge the full benchmark rate for by merely by performing some portion of what the incumbent offers and that's what the clarification order was saying

[00:29:44] Speaker 01:
I want to be very clear about the clarification order because AT&T points to, especially in its reply brief, many things that YMAX was asserting about its services and its network architecture.

[00:29:56] Speaker 01:
But when the Bureau, the Wireline Bureau issued the clarification order, it was not considering any specific architecture.

[00:30:02] Speaker 01:
Those representations that AT&T is citing come from the 2011 case, the complaint case that

[00:30:09] Speaker 01:
originated in the Enforcement Bureau.

[00:30:17] Speaker 01:
What the Bureau was doing in the clarification order was not deciding the minimal functional equivalence for end office switching.

[00:30:24] Speaker 01:
WIMACS may have wished that the Commission would do that, but the Commission didn't do it.

[00:30:28] Speaker 01:
The Commission merely addressed some abstract language that it thought was overbroad.

[00:30:33] Speaker 01:
WIMACS was saying,

[00:30:34] Speaker 01:
Please confirm that we can charge the full benchmark rate merely by performing some portion of the incumbents access charge services and that could have enabled double billing.

[00:30:45] Speaker 01:
That was the commission's concern as is clear on the face I think of paragraph four of the clarification order and that tracks exactly what the commission

[00:30:55] Speaker 01:
was explaining in the footnote and in paragraph 970.

[00:31:01] Speaker 01:
And in fact, it's the same, you know, the same requirement is in the cemetery rule itself.

[00:31:08] Speaker 04:
Council, the commission in paragraph 33 of the clarification order acknowledges AT&T's contention that what the commission is talking about or what's involved here fits more within a tandem switch than an end office switch.

[00:31:25] Speaker 04:
And so you note that correctly.

[00:31:28] Speaker 01:
Of the clarification order?

[00:31:30] Speaker 04:
Yes.

[00:31:31] Speaker 01:
Okay.

[00:31:32] Speaker 04:
But you never, not you, the commission never answers that contention.

[00:31:36] Speaker 03:
There is no paragraph.

[00:31:37] Speaker 04:
And a sort of convenient way of.

[00:31:40] Speaker 02:
Which order are you looking at?

[00:31:42] Speaker 04:
Paragraph 33 of the clarification order.

[00:31:44] Speaker 02:
There is no paragraph 33, that's what I'm looking at.

[00:31:48] Speaker 02:
I'm trying to find it.

[00:31:49] Speaker 01:
Could it be the declaratory ruling?

[00:31:52] Speaker 04:
I'm sorry, the declaratory ruling.

[00:31:54] Speaker 04:
Oh, yes.

[00:31:55] Speaker 04:
And it seems to me an effort to sort of map out that contention appears in Attachment A to the Lawson Letter 1027 of the Joint Appendix.

[00:32:09] Speaker 04:
I was wondering if you could just direct your attention to that.

[00:32:15] Speaker 01:
I think the commission's view is that in tandem switching, there isn't any of the call intelligence functions that happen in end office switching.

[00:32:25] Speaker 01:
There isn't call management or call setup.

[00:32:28] Speaker 01:
There's no need to monitor a call.

[00:32:30] Speaker 04:
Is there some place where one could see that confirmed?

[00:32:38] Speaker 04:
My impression has been that in the first place call intelligence is largely provided by the SS7 network and all this is going through tandem switches.

[00:32:57] Speaker 01:
Well, as I understand tandem switching, it's transporting the call.

[00:33:01] Speaker 01:
It's doing what is necessary to deliver the call to the next stage in the transit path.

[00:33:09] Speaker 01:
In a traditional architecture, it would be to the end office switch.

[00:33:15] Speaker 01:
that's different from doing the call setup and management and monitoring that happens in end office switching for the end user, and that those functions aren't performed by the tandem switch.

[00:33:25] Speaker 01:
Although I should say, too, that my understanding is that competitive carriers, when we talk about tandem switches and end office switches and this neighborhood architecture that AT&T describes in its briefs, that's something that has, that the competitive carriers didn't

[00:33:44] Speaker 01:
they had a different architecture even in the old world before VoIP and that's so there may be switches that can perform that are able to

[00:33:57] Speaker 01:
transport a call, do both the function of transmitting a call to the next, to another switch and or instead sending it directly to the call destination and performing those intelligence functions.

[00:34:12] Speaker 01:
But you pointed me to 1027.

[00:34:13] Speaker 01:
Right.

[00:34:14] Speaker 04:
It's agency's effort to lay out its positions.

[00:34:19] Speaker 04:
Right.

[00:34:20] Speaker 04:
But the end of the switch

[00:34:22] Speaker 04:
uniquely does.

[00:34:23] Speaker 04:
Let me just make that more clear.

[00:34:25] Speaker 04:
If there are switches that in one relationship perform four contributions and in another specifically end off the switches uniquely perform an additional two, it seems rather odd to say that if only the four

[00:34:51] Speaker 04:
generically provided contributions are being performed.

[00:34:56] Speaker 04:
Therefore, it's an end office switch or the functional equivalent of an end office switch.

[00:35:02] Speaker 01:
Well, as I said, and I apologize for not being able to point you to a precise place discussion in the order that makes this point, but my understanding

[00:35:15] Speaker 01:
is that the tandem switches don't perform these call intelligence functions or that anyway when they're acting as tandem switches, as I said, there may be equipment that can perform many functions, but what the commission looked to is what is the function that, what are the essential functions that are being performed for the purpose of switching and

[00:35:38] Speaker 04:
Can you point me to some commission decision which makes clear that these functions are not performed by tandem switches?

[00:35:55] Speaker 01:
I'm sorry, I can't point you to a commission decision.

[00:35:57] Speaker 04:
I would have thought that if the commission took on board the claim

[00:36:05] Speaker 04:
that it refers to in paragraph 33, it would want to respond to that.

[00:36:13] Speaker 04:
And response to that would seem to require showing what tandem switches don't do that is being done here.

[00:36:25] Speaker 04:
I mean, maybe it's out there, but I just have to say it's not in anything.

[00:36:30] Speaker 01:
It might have been better to discuss that at greater length.

[00:36:34] Speaker 01:
I think in response to your question, I think the AT&T in this page you've pointed me to is relying on the RAO cases.

[00:36:47] Speaker 01:
which the commission did discuss in the order, and I think the commission's view of that decision is that it was specific to, it was talking about something that was a hallmark, interconnection was a hallmark of an end office switch in a traditional architecture, but those decisions focus on the many call control functions.

[00:37:09] Speaker 01:
you know, on this chart of the commissions, the commission has explained in the declaratory ruling that they don't think that interconnection is the material, is the function of switching when you're looking at a wholly new architecture.

[00:37:29] Speaker 04:
I guess I come back to my earlier point that the commission is drawing a distinction

[00:37:38] Speaker 04:
implicitly, though not explicitly, between end office switches and tandem switches.

[00:37:44] Speaker 04:
But that, for that distinction to be meaningful, it seems to require a finding that tandem switches don't perform the functional equivalent, if I may use the term, of whatever it is that's at issue here.

[00:38:07] Speaker 01:
Well, I think that

[00:38:08] Speaker 01:
the commission was focused on trying to, you know, in this respect and it's clear from the disputes about the scope, the proper scope of the Voip cemetery rule that arose immediately after the

[00:38:25] Speaker 01:
rules adoption that the commission could have been clearer in a number of respects, but in the face of that uncertainty, AT&T has relied on this kind of connect the dots method of reading meaning into the language of the rule that isn't there, and I think any

[00:38:44] Speaker 01:
their position that functional equivalence when the commission has said, as Judge Rogers was pointing out, that the intent here was to adopt a rule that was not dependent on technology and modes of transmission, but that was focused on the functions and the call intelligence function being a central function that can be accomplished by many modes of transmission.

[00:39:09] Speaker 01:
that notwithstanding, you know, the possibility that the commission could have been clearer, AT&T is asking the court to overlook, express language in every source that it's pointing to as a basis for reading in this limitation into the scope of the rule.

[00:39:27] Speaker 04:
And I see my time.

[00:39:33] Speaker 01:
Well, no, I think functional equivalent is, I think, a broad term that AT&T wants the court to read it narrowly.

[00:39:42] Speaker 01:
Why do they think the court should read it narrowly?

[00:39:45] Speaker 01:
Based principally on YMAX 2011, on paragraph 970 and footnote 2028 of the transformation order.

[00:39:54] Speaker 01:
and on the Bureau of Clarification order.

[00:39:56] Speaker 01:
And in each case, arriving at the interpretation of those sources that AT&T wants the court to reach requires overlooking limiting language and context, as you were saying, Judge Williams, that the commission included in each of those orders.

[00:40:15] Speaker 01:
And the commission here had asked in the notice of proposed rulemaking leading up to the adoption of the VoIP Cemetery rule whether it should draw

[00:40:23] Speaker 01:
a distinction between over-the-top VoIP and facilities-based VoIP that was at paragraph 612 of the Notice of Proposed Rulemaking.

[00:40:31] Speaker 01:
Having asked that question, the Commission did not distinguish between those technologies in the text of the rule and the Commission at paragraph 940 of the Transformation Order, where it's explaining the scope of the new intercarrier compensation regime

[00:40:47] Speaker 01:
that it's about to adopt says it's focused on all VoIP PSTN traffic.

[00:40:52] Speaker 01:
And as the commission explained in the declaratory ruling, that means all traffic exchanged between the traditional phone network and IP network.

[00:41:05] Speaker 01:
And that phrase is broad enough to encompass both over the top VoIP and facility space VoIP.

[00:41:10] Speaker 01:
And if there are no further questions, I'll rest on that discussion in the briefs.

[00:41:16] Speaker 01:
Thank you.

[00:41:22] Speaker 02:
All right.

[00:41:23] Speaker 02:
So, Council for Interveners.

[00:41:29] Speaker 02:
Good morning.

[00:41:30] Speaker 00:
Good morning.

[00:41:30] Speaker 00:
Thank you, Your Honor.

[00:41:31] Speaker 00:
I'm Christopher Wright, representing the interveners who are the lex who partner with VoIP providers in these cases.

[00:41:39] Speaker 00:
I think it might be useful at this point to actually focus on the language of what I think is the critical rule here, which is the regulation adopted to define end office access service.

[00:41:51] Speaker 00:
It's in page one of the addendum to AT&T's opening brief, and the point I want to make by looking at this is that Judge Rogers, this regulation fully indicates the breadth of the rule as does paragraph 970 of the 2011 order, and Judge Williams

[00:42:16] Speaker 00:
Putting an IP address is, in fact, a key part of end office switching, as you suggested as well.

[00:42:26] Speaker 00:
So... I'm sorry.

[00:42:28] Speaker 04:
What is it in the language?

[00:42:29] Speaker 04:
This is 903D that you're pointing to?

[00:42:33] Speaker 00:
Yes.

[00:42:34] Speaker 04:
Okay.

[00:42:35] Speaker 00:
51.903D on the addendum, which defines end office access service.

[00:42:41] Speaker 00:
The first definite... There are three alternatives here.

[00:42:45] Speaker 00:
And the first alternative sounds a lot like legacy TDM service, sort of the old-fashioned network.

[00:42:54] Speaker 00:
I would note that it doesn't – it says the switching of access traffic at the carrier's end office and delivery to the called party's premises.

[00:43:04] Speaker 00:
In this connection, let me note that it doesn't actually say the linking, and a point I'd like to make in connection with this is

[00:43:12] Speaker 00:
The end office access charge covers switching.

[00:43:16] Speaker 00:
It does not cover the cost of the port, which is the device that actually connects the switch to the loop.

[00:43:24] Speaker 00:
And of course, end office access service does not cover the cost of the loop.

[00:43:29] Speaker 00:
As the commission said in paragraph 8 of its order and note 27, those costs in the traditional network are collected by the

[00:43:41] Speaker 00:
common carrier line charge, not the switching charge.

[00:43:46] Speaker 00:
So this case has been argued as if we're trying to collect for switching and delivering when we hand it to somebody else to deliver.

[00:43:55] Speaker 00:
We're trying to collect for switching.

[00:43:59] Speaker 00:
And so if you look at the second and third definitions.

[00:44:04] Speaker 04:
Are you saying that when it uses service,

[00:44:08] Speaker 04:
It's encompassing switching and port, switch and port.

[00:44:14] Speaker 00:
We are not seeking to collect for the porting function, and it's the porting function that is the function of actually connecting the switch in the loop.

[00:44:23] Speaker 00:
And we're not attempting to collect for the loop function, for the delivery function.

[00:44:28] Speaker 00:
We're attempting to charge for the access, the end office access system, which the FCC has now defined very broadly

[00:44:38] Speaker 00:
not just as in one, but in two and three.

[00:44:41] Speaker 00:
And two is very broad and three is even broader.

[00:44:47] Speaker 00:
Pardon?

[00:44:47] Speaker 04:
It doesn't say end office access switch.

[00:44:51] Speaker 04:
It says end office access service.

[00:44:54] Speaker 04:
Is that intended in your view to

[00:44:57] Speaker 04:
reach beyond switching because then in one, which as you say, is the legacy system.

[00:45:03] Speaker 00:
So your honor, if our service falls into any one of these, we're entitled to receive.

[00:45:07] Speaker 00:
I understand.

[00:45:07] Speaker 04:
I just want to get your reading of paragraph one and the heading.

[00:45:15] Speaker 00:
Right.

[00:45:17] Speaker 00:
if you perform one of these three things, you're entitled to the access charge that we're seeking.

[00:45:23] Speaker 00:
And we think we qualify under two and three, which are plainly broader than one, which covers what AT&T does, and AT&T seems to think is the whole... I'm still trying to figure out whether the point that one has a clause ending in the word switch, and it has an and,

[00:45:45] Speaker 04:
and then delivery, and are you, to some extent, calling our attention to that and saying that service encompasses both switch and delivery?

[00:45:59] Speaker 00:
Well, let's look at two, which is broader.

[00:46:00] Speaker 00:
Again, we think we're under two.

[00:46:02] Speaker 00:
So one defines what AT&T does, and no one denies when it's acting as elect, it gets end office switching.

[00:46:12] Speaker 00:
Two is the routing of IXE traffic to or from the call party's premises, either directly or via contractual or other arrangements with an affiliated or unaffiliated entity, regardless of the specific functions provided or the facilities used.

[00:46:31] Speaker 00:
This is an extraordinarily broad definition, just as paragraph 970 is quite broad.

[00:46:38] Speaker 00:
The commission in 2011 is very much changing the rules that govern these charges.

[00:46:48] Speaker 00:
And if our deference means anything, it means that the FCC can reasonably conclude that we're performing this service, or at least under three, the functional equivalent of that service.

[00:47:01] Speaker 04:
Let me just ask you a question.

[00:47:03] Speaker 04:
And that is, you're saying that

[00:47:07] Speaker 04:
routing as used in subparagraph two encompasses the process by which the called telephone number is transformed into an IP address.

[00:47:26] Speaker 00:
A, your honor.

[00:47:28] Speaker 00:
Ultimately, so I'm sorry.

[00:47:31] Speaker 00:
The FCC has decided that this is under three.

[00:47:36] Speaker 00:
I'm trying to make the point that this is very broad.

[00:47:38] Speaker 00:
The FCC did not say that this is under two.

[00:47:42] Speaker 00:
It's very broad language.

[00:47:44] Speaker 00:
It could have said.

[00:47:45] Speaker 00:
The FCC made the easier call that this is, that one is traditional, two is a very broad new reading,

[00:47:54] Speaker 00:
Three says functional equivalent.

[00:47:58] Speaker 00:
The FCC, it seems to me, is at a zenith in the amount of deference it gets in interpreting what this regulation means.

[00:48:06] Speaker 00:
And in the order, I'd like to point you to the place in the order where the commission actually describes what end office switching is.

[00:48:22] Speaker 00:
as paragraph 28 at JA 1148.

[00:48:26] Speaker 00:
And what it says is functional equivalent.

[00:48:31] Speaker 00:
It is certainly within the scope of its authority.

[00:48:35] Speaker 00:
It basically means, the way it defines it is that if you ensure that it gets to the called party's premises,

[00:48:48] Speaker 00:
you're doing the functional, and then manage the call, which no one disputes happens here, then you qualify for these switching charges.

[00:48:58] Speaker 00:
And again, in this connection, let me note that, you know, AT&T, in its opening brief, footnote 13 says, our deference is wrong.

[00:49:09] Speaker 00:
And in the reply brief, they say in a footnote that they're reserving their right to argue that to the Supreme Court.

[00:49:15] Speaker 05:
The author of Hour thought it was wrong, too.

[00:49:20] Speaker 05:
Well, unfortunately, he's no longer with us.

[00:49:22] Speaker 00:
Well, Your Honor, I just want to make the point that I think the lawyers understand that under our deference, the FCC wins here.

[00:49:31] Speaker 00:
And, you know, of course, this Court applies our deference.

[00:49:39] Speaker 00:
Yeah.

[00:49:39] Speaker 04:
And if I could say a word about... Can I just ask a question about this Paragraph 28, which is of great interest?

[00:49:49] Speaker 04:
A good deal of the activity of the functions described there, particularly in line five of the paragraph, call set up conduct and take down, seem to be functions performed by switches that are not end office switches.

[00:50:15] Speaker 04:
I mean, is that the case?

[00:50:17] Speaker 00:
What it says, though, is local switching ensures a connection from the transport across the network to the termination point phone device.

[00:50:28] Speaker 00:
The LEC transforms the call from TDM to Internet Protocol packets and then works with its VoIP partner to do exactly that, ensure a connection from the transport across the network

[00:50:44] Speaker 00:
to the termination point, the phone device.

[00:50:47] Speaker 00:
How it does it is different than how legacy TDM networks do it.

[00:50:54] Speaker 00:
But this is a functional equivalence test.

[00:50:56] Speaker 00:
It's not how you do it.

[00:50:57] Speaker 00:
It's whether what you're doing is functionally equivalent.

[00:51:02] Speaker 00:
And Your Honor, you were pointing out that AT&T is actually arguing.

[00:51:08] Speaker 00:
AT&T doesn't say that we're not entitled to access charges.

[00:51:13] Speaker 00:
It says we're entitled to tandem switching access charges rather than end office switching access charges.

[00:51:20] Speaker 00:
Again, under our, Your Honor, I think there's no question that the FCC has to prevail in a claim that its regulation, its determination of what's functionally equivalent to determine that it's more like end office switching rather than tandem switching is just the sort of thing where it's

[00:51:43] Speaker 00:
technical matter where deference to the FCC ought to be at its zenith.

[00:51:50] Speaker 00:
If I could say a word about YMAX, YMAX is a file rate case.

[00:51:58] Speaker 00:
I don't know why they did it, but the drafters of YMAX's tariff simply misdescribed its service.

[00:52:06] Speaker 00:
If you look at page seven of AT&T's reply brief, you'll say that they described it to do something they're not doing.

[00:52:16] Speaker 00:
They described it as if they're connecting loops to switches.

[00:52:22] Speaker 00:
And of course, the FCC properly said, and this is as well settled as anything, you can't collect for what's not in your tariff.

[00:52:32] Speaker 00:
And of course, in WIMACS, it twice reserved its right

[00:52:36] Speaker 00:
to change its decision if YMAX came back with a new tariff.

[00:52:44] Speaker 00:
YMAX didn't come back with a new tariff in the clarification rule.

[00:52:48] Speaker 00:
It came back saying, well, we do some portion of this.

[00:52:53] Speaker 00:
Isn't that good enough?

[00:52:54] Speaker 00:
And the FCC faced with that broad proposition said, no, there might be double billing.

[00:53:00] Speaker 00:
And one thing I would like to point out is that

[00:53:03] Speaker 00:
AT&T suggested that WiMAX is just like over-the-top VOIP and that WiMAX dumped calls on the public Internet.

[00:53:16] Speaker 00:
In fact, if you look at the description at JA 885 paragraph 7, which is from the commission's WiMAX order, WiMAX had a very strange configuration.

[00:53:31] Speaker 00:
whatever it is, it's not traditional facilities-based or over-the-top VOIP.

[00:53:37] Speaker 00:
And rather than dumping the calls on the internet, that paragraph tells us that WiMAX handed the calls to AT&T for delivery.

[00:53:47] Speaker 00:
And, you know, I don't know if the commission was thinking of this when it said there's a double billing problem, but why perhaps AT&T's LEC could have collected

[00:54:00] Speaker 00:
access charges from AT&T's IXE in that case, but YMAX is a strange creature, and what the Bureau said really has nothing to do with anything.

[00:54:17] Speaker 05:
You don't agree, or do you, that the entire transformation order

[00:54:23] Speaker 05:
all 900 and some paragraphs is a legislative rule.

[00:54:29] Speaker 00:
So, Your Honor, certainly the rules that are codified are the rules, and this Court frequently looks at the relevant explanation of those rules and takes them very seriously as explaining what the rules mean.

[00:54:50] Speaker 00:
And so I don't

[00:54:52] Speaker 00:
I don't know that there's any practical difference when the Commission does that.

[00:55:02] Speaker 05:
Well, if there's an interpretation of the actual rules in the preamble to the rules and the Commission changes its interpretation, is that an amendment of the rules?

[00:55:14] Speaker 00:
You know, I think I would need an actual example before, in order to describe that.

[00:55:23] Speaker 00:
For purposes of this case, of course, we don't, you know, we started with a rule.

[00:55:29] Speaker 00:
I just don't think it's at all arguably an amendment of the rule to define, you know, to define functional equivalent on a case-by-case basis.

[00:55:43] Speaker 00:
That seems like normal practice.

[00:55:45] Speaker 00:
Oh, one other thing I'd like to say about WiMAX.

[00:55:48] Speaker 00:
If AT&T were right and the Commission had decided that only facilities-based void gets covered and not OTT, not over the top, why wouldn't the Bureau have said, oh, well, this is over the top, you say, so it's not covered?

[00:56:04] Speaker 00:
Well, they didn't say that.

[00:56:07] Speaker 00:
And nobody was reading the rule that way in 2011, of course, except for AT&T.

[00:56:14] Speaker 00:
hundreds of IXEs, and they all read it the way my clients read it, and Verizon a year later decided to make the same argument as AT&T, but this hasn't come up, but there's no basis for reliance.

[00:56:35] Speaker 00:
AT&T's reliance wasn't reasonable here.

[00:56:38] Speaker 00:
Meaning this rule was in doubt from the start.

[00:56:44] Speaker 00:
been disputed for five years now.

[00:56:49] Speaker 03:
Anything further?

[00:56:51] Speaker 00:
Pardon, Your Honor?

[00:56:52] Speaker 03:
Anything further?

[00:56:53] Speaker 00:
No, Your Honor.

[00:56:56] Speaker 03:
Thank you.

[00:56:57] Speaker 03:
All right.

[00:57:04] Speaker 06:
I believe the other counsel got it.

[00:57:11] Speaker 02:
Yes.

[00:57:11] Speaker 06:
Thanks.

[00:57:12] Speaker 06:
There's a number of things I'd like to address.

[00:57:14] Speaker 02:
If you're assisting the court

[00:57:16] Speaker 06:
I hope that I certainly hope that's what I will be doing.

[00:57:19] Speaker 06:
First of all, on the Judge Williams, I think you're absolutely right.

[00:57:22] Speaker 06:
There is no answer to the point that you posed about why the functions that a tandem switch are a subset of the end office switch.

[00:57:33] Speaker 06:
And so why is this just all lumped together?

[00:57:36] Speaker 06:
Council did not identify anything in the opinion in the declaratory ruling that in fact explained that anomaly.

[00:57:44] Speaker 06:
With respect to whether we're charging for the port, that's incorrect.

[00:57:49] Speaker 02:
If you look at... Can I just ask you a quick question on that?

[00:57:51] Speaker 02:
Sure.

[00:57:52] Speaker 02:
And to the extent the Commission says, arguably, that tandem was in a world of physical facilities, and that's not what we're looking at now.

[00:58:09] Speaker 02:
So long as the function

[00:58:14] Speaker 02:
is provided.

[00:58:14] Speaker 02:
However, that's enough.

[00:58:17] Speaker 02:
And we don't care about the actual transport

[00:58:23] Speaker 06:
Yes, Your Honor, but the point here is, what's the function?

[00:58:26] Speaker 02:
I understand.

[00:58:27] Speaker 06:
And the function can't be, they say it doesn't, the function of an end office switch, which we've explained, is to take the call of the high capacity line.

[00:58:35] Speaker 06:
That's the thing uniquely done there.

[00:58:37] Speaker 06:
They just say, well, the functions really call signaling and control, and our point is, but that's, other switches do that too.

[00:58:43] Speaker 06:
So that can't be the essential functional equivalent of end office switching.

[00:58:47] Speaker 06:
And so, Your Honor, you get to the argument where they say, well, yeah, but you're trying to charge for that line that connects to the home.

[00:58:56] Speaker 06:
And in fact, we're not.

[00:58:57] Speaker 06:
It's true that the line port is a separate charge, but in the very 1997 order that they cite, paragraph 135, about where the line port has cost has been moved to a different part of the accounting rules,

[00:59:12] Speaker 06:
In paragraph 135, they say, of course, the switching fabric, the switching function, the switching matrix is still a usage-sensitive charge.

[00:59:22] Speaker 06:
And that's exactly the thing we're talking about.

[00:59:24] Speaker 06:
We're talking about the call comes in on one line.

[00:59:27] Speaker 06:
It's got to go out on another line.

[00:59:29] Speaker 06:
How does that happen?

[00:59:30] Speaker 06:
It's the switching fabric in between that makes that connection.

[00:59:34] Speaker 06:
And that's the fundamental function of the end office, and it's not replicated in their services.

[00:59:41] Speaker 02:
So when the Commission says repeatedly, you're only entitled to recover for the functions you actually perform,

[00:59:52] Speaker 02:
Throughout this case, I thought if I had numbers and I could see what they were related to, I would understand whether or not the charges were appropriate.

[01:00:02] Speaker 02:
But we don't have that, as I understand it.

[01:00:04] Speaker 02:
So we're trying to understand this case in sort of an abstract way.

[01:00:10] Speaker 02:
And the commission keeps coming back and saying, we're in a new world now.

[01:00:13] Speaker 02:
It really doesn't matter how you do this, so long as you do it.

[01:00:16] Speaker 02:
And in any event,

[01:00:18] Speaker 02:
We're only going to allow you to recover for the services you actually provide.

[01:00:24] Speaker 02:
Right.

[01:00:24] Speaker 06:
And if I could go back, Your Honor, I think this is the illustration that gets at exactly what you're talking about is the facilities-based void call.

[01:00:32] Speaker 06:
Yeah.

[01:00:33] Speaker 06:
It's a new world.

[01:00:34] Speaker 06:
It's IP.

[01:00:35] Speaker 06:
It's not TDM.

[01:00:36] Speaker 06:
It's different formatting.

[01:00:38] Speaker 06:
It's all different, exactly what the Commission is talking about.

[01:00:40] Speaker 06:
And in that world, the function of taking the call off the pipe and connecting it through the switch to the call party does occur, and AT&T says, we pay for that.

[01:00:51] Speaker 06:
We're not disputing that.

[01:00:52] Speaker 06:
That is the functional equivalent of end office switching.

[01:00:56] Speaker 06:
When you just put the call on the internet and say, God bless, somebody else is going to make sure it gets to where it's going to go, and that's the ISP provider, that is not the equivalent of that essential function in the end office.

[01:01:08] Speaker 02:
And so when the commission could not reasonably interpret it.

[01:01:14] Speaker 06:
Well, the commission had previously made clear, we submit, through the transformation order, and our point, Judge Randolph, is not that every word in the transformation order is itself part of the rule, but certainly the discussion that we've been focusing on in Paragraph 970 and the footnote to 2028, we say is either part of the rule under the APA provisions we've cited, or it's necessarily the explication, contemporaneous explication, that establishes the meaning of the latter.

[01:01:43] Speaker 06:
And under either, we win in terms of this being a legislative rule that's been amended.

[01:01:48] Speaker 06:
So then the commission comes back and they say, and this is all in their order, and I think this is all, with all due respect, a lot of hand waving.

[01:01:55] Speaker 06:
They say, the Lex do the same thing in over the top that they do in facilities based.

[01:02:00] Speaker 06:
Why shouldn't they get paid for that?

[01:02:02] Speaker 06:
And we don't dispute they do the same thing.

[01:02:03] Speaker 06:
The point is they don't do end office switching in either circumstance.

[01:02:08] Speaker 06:
Where end-office switching occurs is in the facilities-based side by the facilities-based provider that takes the call off the trunk and puts it on the line.

[01:02:17] Speaker 06:
In the OT over-the-top setting, that function is performed by an ISP that's not getting paid for it through access charges.

[01:02:26] Speaker 06:
And they want to collect that access charge as though they're doing it.

[01:02:29] Speaker 06:
That gets to the subparagraph D2 that Mr. Wright discussed.

[01:02:35] Speaker 06:
Commissioner Pai drops a footnote in his dissent and he says, nobody relies on the theory that that's the basis for recovering these charges, nor could they, because that's about having an affiliated provider through a contractual arrangement with an affiliated provider.

[01:02:49] Speaker 06:
And when they put the call on the Internet and it goes on its merry way until some broadband provider puts it on the line that the called party's at, that ISP is the one doing that work, not some affiliated entity with the LEC.

[01:03:06] Speaker 06:
That's not its VoIP partner.

[01:03:09] Speaker 06:
They also say that there are two points that were made about the idea that transmission, this is all about transmission.

[01:03:18] Speaker 06:
Well, that gets again to the difference between the line charge and the switching charge.

[01:03:23] Speaker 06:
We're not saying that we won't pay because it's the line port.

[01:03:30] Speaker 06:
We're saying we don't have to pay over the top because there's no switching being done.

[01:03:34] Speaker 06:
When it comes to YMAX, there's lots of discussion about it's a file tariff doctrine case.

[01:03:41] Speaker 06:
I haven't heard any explanation for why it's being cited to illustrate a fundamental limiting principle on functional equivalence.

[01:03:48] Speaker 06:
It just doesn't make any sense to say, by the way, you can't charge for functions you don't perform even under a functional equivalence test.

[01:03:56] Speaker 06:
See a file rate case.

[01:03:58] Speaker 06:
This is about functional equivalence.

[01:04:01] Speaker 06:
Then when it comes to the request for clarification, we're told they didn't actually talk about how they, WIMAC didn't really talk about what it was doing.

[01:04:09] Speaker 06:
It wanted an answer to the question, what if we just give you the number and some portion of the connection?

[01:04:14] Speaker 06:
That's all we care about, finding out.

[01:04:16] Speaker 06:
But if you take a look at their request,

[01:04:20] Speaker 06:
They, on page two, this is JA988, they say, the commission went on to say that you can't charge for functions you don't perform, and you cited the WIMAX case.

[01:04:31] Speaker 06:
And they say, judging from the paragraphs of the WIMAX order that it references, the commission might appear to be suggesting that a physical transmission facility is connecting the IXC, the long-distance carrier, and the VoIP service provider,

[01:04:42] Speaker 06:
are provided in part by one or more related ISPs, as is the case with WiMAX or over-the-top VOIP providers, then the LEC and its VOIP service partner are not performing the access function and cannot charge for it.

[01:04:54] Speaker 06:
That's crystal clear.

[01:04:55] Speaker 06:
We're worried that because we're not the last mile facility providers, we don't get to charge under a functional equivalence regime.

[01:05:01] Speaker 06:
And the Bureau clearly understood this and said, yeah, that's right, you don't, because you can't charge for things you don't perform.

[01:05:11] Speaker 03:
Anything further?

[01:05:15] Speaker 06:
I'm sorry?

[01:05:16] Speaker 03:
Anything further?

[01:05:18] Speaker 06:
I'm just checking your honor.

[01:05:22] Speaker 06:
With respect to the, I'd like to make two other points.

[01:05:27] Speaker 06:
One is with respect to the hour deference, our position obviously is not, we're saying the rule is clear and couldn't have been amended, so all these arguments about hour, that's not responsive to our point.

[01:05:38] Speaker 06:
And then on the everybody else understood it the way we say, but the record doesn't support that assertion.

[01:05:45] Speaker 06:
There's just speculation that, in fact, the charges were assessed and they were paid, so that must mean that everybody understood except AT&T.

[01:05:54] Speaker 06:
My understanding, Your Honor, is that these bills come in and they don't isolate and say, here's the access charges for over-the-top void calls, here's the access charges for facility-based calls, here are the other access charges for traditional calls.

[01:06:06] Speaker 06:
My understanding for my client is they have to actually analyze the numbers to figure that out.

[01:06:11] Speaker 06:
So, I readily concede that what I just said is not in the record, but nor is there anything in the record that explicitly says, we saw these charges, we understood what they were for, and we thought, you know what, the transformation order is pretty vague, we guess we've got to pay them.

[01:06:26] Speaker 06:
So, with that, Your Honor, I have nothing further.

[01:06:28] Speaker 02:
Thank you very much.

[01:06:30] Speaker 02:
Thank you, Your Honor.