[00:00:00] Speaker 01: Case number 19-1233 Ed Al. [00:00:03] Speaker 01: Great Lakes Communications Corp. [00:00:05] Speaker 01: Ed Al. [00:00:05] Speaker 01: Petitioners versus Federal Communications Commission and United States of America. [00:00:10] Speaker 01: Ms. [00:00:10] Speaker 01: Coppola for the joint petitioners. [00:00:12] Speaker 01: Mr. Carr for the respondents. [00:00:17] Speaker 04: Good morning, Ms. [00:00:18] Speaker 04: Coppola. [00:00:18] Speaker 04: You can proceed. [00:00:20] Speaker 03: May it please the court. [00:00:22] Speaker 03: Lauren Coppola for joint petitioners. [00:00:25] Speaker 03: Petitioners ask the court vacate the FCCs [00:00:29] Speaker 03: 2019 order on access stimulation. [00:00:32] Speaker 03: Respectfully, this court call demonstrates one of the core reasons why this order should be vacated. [00:00:40] Speaker 03: Currently, we are all on Zoom's platform. [00:00:43] Speaker 03: Zoom is a high volume conferencing application that generates enormous amounts of terminating call traffic, offers a free service, [00:00:55] Speaker 03: and was recently lauded by the commission as an essential service for the public in the COVID-19 crisis. [00:01:02] Speaker 03: If we were all to dial into this call using phone audio, we would dial a telephone number with a 646 area code, a telephone number connected by a competitive local carrier located in New York, New York. [00:01:19] Speaker 03: That urban carrier that connects this call is paid [00:01:23] Speaker 03: access charges by other carriers to do so. [00:01:27] Speaker 03: However, if this very same call were connected by a small rural competitive local carrier, such as petitioner Northern Valley here, this call would be slapped with an access stimulation label. [00:01:45] Speaker 03: And worse, under the commission's 2019 order, petitioners [00:01:51] Speaker 03: would have to pay the costs to connect this call. [00:01:56] Speaker 03: The economics are entirely reversed. [00:02:00] Speaker 03: Now the commission and long distance carriers would have you believe that access stimulation traffic is synonymous with sexually explicit chat lines. [00:02:12] Speaker 03: And the record and the order is filled with overheated and misleading inflammatory statements. [00:02:20] Speaker 03: But this is a smokescreen [00:02:22] Speaker 03: a diversion to mask the commission's desperate treatment of carriers connecting the same exact calls. [00:02:32] Speaker 03: And with this order, the commission is picking winners and losers in the marketplace. [00:02:38] Speaker 03: It is restricting and steering the output of a service. [00:02:45] Speaker 03: The commission's 2019 order is tantamount to adjudication [00:02:51] Speaker 03: against a small group of carriers that's disguised as volemaking, really, without the procedural safeguards of adjudications for the party's impact. [00:03:02] Speaker 03: The FCC admits in its briefing that the commission reasonably decided to focus on carriers that are engaging or have engaged in access stimulation. [00:03:14] Speaker 03: It's an outcome-based rule, a tautology, in fact. [00:03:18] Speaker 04: Are you saying, Council, [00:03:22] Speaker 04: that there's something improper with the commission regulating and discouraging access stimulation? [00:03:32] Speaker 04: I mean, hasn't that ship already sailed? [00:03:36] Speaker 03: The commission is free to regulate access stimulation, Your Honor, but it has to do so in a lawful manner. [00:03:44] Speaker 03: And the key here is the commission used an unlawful rule [00:03:50] Speaker 03: for a lawful means and it simply can't do that. [00:03:53] Speaker 03: And what I mean by that is the rule erases the congressional mandate for reciprocal compensation and thus must be vacated. [00:04:04] Speaker 03: So section 251B of the Telecommunication Act requires that carriers provide reciprocal compensation. [00:04:17] Speaker 03: And instead, [00:04:18] Speaker 03: the commission's order, which obliterates the word reciprocal. [00:04:24] Speaker 03: It disregards the establishment of universal billing keep and creates a special rule just for the targeted carriers here, buy and give away. [00:04:35] Speaker 00: And so- Why do you say it's, first of all, the FCC relies more primarily on the statutory provision [00:04:45] Speaker 00: that allows them to prevent unreasonable charges, number one. [00:04:51] Speaker 00: Number two, why do you say it's not reciprocal? [00:04:55] Speaker 00: After all, if you're making a bloody fortune receiving calls, but not responding with equal revenue on making calls, [00:05:14] Speaker 00: Why is that reciprocal? [00:05:18] Speaker 03: Well, here, Your Honor, there is no reciprocal compensation between the carriers. [00:05:24] Speaker 00: On each call. [00:05:25] Speaker 00: Is that what you mean? [00:05:28] Speaker 03: That's what I mean. [00:05:29] Speaker 00: But if you group the calls together, it's reciprocal, isn't it? [00:05:34] Speaker 03: It is not, because one carrier has not only to pay to connect calls, it also has to pay to send calls. [00:05:42] Speaker 03: whereas the long distance carrier here gets paid both ways. [00:05:47] Speaker 03: And the commission does rely on section 201B of the Act, but it cannot create an unlawful rule to achieve a lawful means. [00:05:59] Speaker 03: And so because the commission exceeded its statutory authority, this rule, this order must be vacated. [00:06:09] Speaker 03: It should also be vacated, Your Honors, because [00:06:12] Speaker 03: The order is beyond repair and the deficiencies are in it are fatal. [00:06:18] Speaker 03: As in there is no rational connection between the harm that the FCC is allegedly solving for and the rule. [00:06:29] Speaker 03: Consumer harm. [00:06:31] Speaker 03: The best the commission does is cite self-serving allegations of the long-distance carriers of harm that these long-distance carriers allegedly incur. [00:06:42] Speaker 03: But by the time the commission issues its 2019 order, it all been abandoned public interest here and says in paragraph 32 of the order that the commission's reversal of economics is warranted regardless of how the long distance carriers use their cost savings and instead looks to [00:07:11] Speaker 03: pass on the savings to the incumbent carrier shareholders. [00:07:17] Speaker 03: There is nothing in the Pro-Competitive Telecommunications Act that permits favoring a carrier shareholders over a consumer's choice of services in the market here. [00:07:31] Speaker 03: And so the commission drafted a rule favoring the share, the long distance carrier shareholders [00:07:39] Speaker 03: and putting anti-competitive blocks in place against a small group of carriers. [00:07:47] Speaker 00: Forgive me, counsel, but since the inter-exchange market is competitive and if there's a reduction in the cost for the inter-exchange carrier because of the rule reducing [00:08:08] Speaker 00: access charges at your end. [00:08:11] Speaker 00: If it's a competitive market, isn't it almost certainly true that part of the benefits of that will be passed on to consumers? [00:08:22] Speaker 03: Your honor, the commission would like you to believe that, but we have no data demonstrating that that is true. [00:08:29] Speaker 00: Actually, I learned that in college. [00:08:33] Speaker 03: I understand, Your Honor, and economic theory would make as much sense. [00:08:38] Speaker 03: However, here there's no data. [00:08:40] Speaker 03: And here we had eight years. [00:08:42] Speaker 03: So in 2011, the commission instituted the cap for the transformation order. [00:08:49] Speaker 03: And we had nearly a decade's worth of data to look at to see if it was really true that the cost savings, the long distance carriers derived from [00:09:02] Speaker 03: the reduction in access charges were actually passed on to consumers. [00:09:10] Speaker 03: And there is no data in the record that such savings were passed on to consumers. [00:09:17] Speaker 03: And I will refer you again, Judge Silverman, to the commission pointing to the profits to the long distance carrier shareholders. [00:09:28] Speaker 00: Even if that were true, that would also [00:09:30] Speaker 00: redound to the benefit of consumers ultimately, since the corporation would have more money to invest in modern technology. [00:09:41] Speaker 03: And it may, and the commission does have the ability to consider public interest, but here again, you cannot do so by instituting an unlawful rule, a rule that eviscerates reciprocity and uniformity. [00:09:59] Speaker 03: And I'd like if your honors has no- Ms. [00:10:02] Speaker 02: Coppola, so, I mean, the commission, of course, must treat similarly situated parties similarly, but here, hasn't the commission given, hasn't they, haven't they given adequate reasons for their different treatment? [00:10:17] Speaker 02: I mean, you've repeatedly said that it's unlawful because of the reciprocity point, but what about the commission's reasons for why they are treating the carriers differently? [00:10:28] Speaker 03: Well, the commission's reasons are not, there aren't really any, they aren't tied to logic. [00:10:35] Speaker 03: And they create a rule to look at the 21 carriers who they contend are engaged in access stimulation. [00:10:43] Speaker 00: Excuse me, just a moment, council. [00:10:46] Speaker 00: I'm perhaps getting confused. [00:10:49] Speaker 00: I thought when you were talking about reciprocity, you were talking about the relationship between the competitive carriers [00:10:57] Speaker 00: and the long distance carriers. [00:10:59] Speaker 00: That was your reciprocity point, not the relationship between the competitive carriers and the rate of return carriers. [00:11:10] Speaker 00: Is that correct? [00:11:11] Speaker 00: You're correct. [00:11:12] Speaker 00: You're correct, Judge. [00:11:13] Speaker 00: You have a separate argument that the rate of return carriers are being favored over the competitive carriers. [00:11:22] Speaker 00: That's a separate argument, right? [00:11:24] Speaker 03: That's correct. [00:11:25] Speaker 03: And that can be demonstrated, Judge Silverman, by the commission's last minute change of this rule. [00:11:33] Speaker 03: So getting back to Judge Rao's question, there is no reasonable or logical connection between the change of rules. [00:11:42] Speaker 03: So between the draft order and the final order, the incumbent rurals advocated for a different rule just for them. [00:11:50] Speaker 00: And in doing so, the- Now you're going to the notice question. [00:11:54] Speaker 03: I'm also going to the rational basis. [00:11:58] Speaker 00: Well, let's take them apart. [00:12:00] Speaker 00: The notice question bothered me. [00:12:03] Speaker 00: I thought you made an interesting argument. [00:12:05] Speaker 00: Well, suppose the FCC had done nothing, whatever, with respect to the rate of return carriers and had simply imposed the six to one ratio and the other requirements on transport and switching. [00:12:24] Speaker 00: on your clients. [00:12:27] Speaker 00: Suppose that had been done. [00:12:30] Speaker 00: Wouldn't that have been perfectly in accordance with the notice of proposed rulemaking? [00:12:36] Speaker 03: Well, Your Honor, I think it would have helped fix one of the problems. [00:12:40] Speaker 03: But again, you'll remember in the notice of proposed rulemaking, the FCC proposed a inversion or a reversion of the economics as an alternative [00:12:53] Speaker 03: as an alternative to accepting direct connections. [00:12:58] Speaker 03: Carriers either accept the financial responsibilities or can avoid doing so by offering the direct connection. [00:13:05] Speaker 00: I was just asking about the notice question, the logical outgrowth argument and giving you the hypothetical. [00:13:11] Speaker 00: Suppose instead of a 10 to one ratio for the rate of return carriers, the FCC had ignored altogether. [00:13:22] Speaker 00: the rate of return carriers. [00:13:25] Speaker 00: That would still, that would have been perfectly consistent with a notice. [00:13:28] Speaker 00: Now you still have an argument whether that would be fair or arbitrary and capricious, but it was certainly been consistent with a notice, right? [00:13:36] Speaker 03: That's correct on that limited. [00:13:38] Speaker 00: So if that's true, why is the 10 to one ratio any different? [00:13:45] Speaker 00: If they could have ignored the rate of return carriers altogether with respect to the notice, [00:13:51] Speaker 00: then why the 10 to one makes any difference? [00:13:55] Speaker 03: The 10 to one demonstrates that the commission is treating similarly situated. [00:14:00] Speaker 00: That goes to the merits of the argument, not the notice question. [00:14:04] Speaker 00: I'm only focused on the notice. [00:14:06] Speaker 00: You with me? [00:14:07] Speaker 00: Yes, Judge. [00:14:08] Speaker 00: Okay. [00:14:09] Speaker 00: So that hypothetical seems to me to undermine your position. [00:14:15] Speaker 00: Now, with respect to the more substantive question, whether it's reasonable to treat [00:14:21] Speaker 00: the competitive carriers different from the rate of return carriers? [00:14:26] Speaker 00: What about the government's argument that the rate of return carriers structurally are in a different position? [00:14:34] Speaker 00: They don't have anywhere the flexibility of the competitive carriers because they have a big footprint. [00:14:41] Speaker 00: So they can't move as rapidly and come up with various, which the government calls gimmicks to accentuate their access charges. [00:14:52] Speaker 03: Well, I don't think that reasoning is grounded in the record, Your Honor. [00:14:58] Speaker 03: And moreover, it again appears that the commission is arbitrarily picking good terminating traffic versus bad terminating traffic. [00:15:09] Speaker 03: So you'll see in the record, there's a reference to that rate of return carriers have a lot of terminating [00:15:16] Speaker 03: So the commission is saying, well, we liked a high volume terminating calls if they're call centers, but not conferencing. [00:15:25] Speaker 03: So, and you're providing the rate of, with the difference in the 10 to one and six to one, you're providing rate of return carriers, the ability to make a profit when it connects this zoom calls and petitioners cannot. [00:15:42] Speaker 00: Only 4% of the, [00:15:44] Speaker 00: rate of return carriers had arguably access charges. [00:15:55] Speaker 03: Your honor's referring to a statement in the commission's order about the rate of return carriers. [00:16:02] Speaker 03: So then that point, your honor, demonstrates that the rule is a tautology. [00:16:09] Speaker 03: An access simulator is an access simulator is an access simulator. [00:16:14] Speaker 03: And that is not reasonably tied to one, fixing any public harm, or two, to any reasonable basis to target a group of carriers here. [00:16:26] Speaker 03: The commission has the ability to regulate access stimulation, as I said before. [00:16:31] Speaker 03: But it cannot do so through unlawful rules that erase reciprocity and that do away with the notion of a universal billing keep. [00:16:45] Speaker 00: Now, Council, that gets me to another question. [00:16:47] Speaker 00: I have to confess, I had a devil of a time understanding the network edge problem. [00:16:55] Speaker 00: Could you explain it pretty simply? [00:16:59] Speaker 03: Absolutely, Your Honor. [00:17:00] Speaker 03: I'll say it even as simply as I can, which is that the FCC has been inconsistent on its position in the network edge. [00:17:09] Speaker 03: It's been all over the place in this docket. [00:17:12] Speaker 03: At one point, [00:17:13] Speaker 03: the order seems to place the network edge for the local exchange carriers that are engaged in access stimulation. [00:17:24] Speaker 00: I thought they hadn't really decided the network edge. [00:17:28] Speaker 00: You're right, Your Honor. [00:17:29] Speaker 00: It's still up in the air. [00:17:30] Speaker 03: You're right, Your Honor, it is. [00:17:32] Speaker 03: But because of the implications of the order, which mandates the tandem point as the payment point, [00:17:41] Speaker 03: It creates, it could create a network edge here. [00:17:45] Speaker 00: It could, but not necessarily. [00:17:48] Speaker 03: And if it did, the commission needs to explain it's why it's deviating from prior positions where setting a network. [00:17:57] Speaker 00: That reminds me of my favorite line, if my aunt had wheels should be a trolley car, because it's still up in the air. [00:18:05] Speaker 03: Well, I would submit, Your Honor, that on our papers, we demonstrate that the order sets it for these access-stimulating lacks. [00:18:14] Speaker 03: And we should not, again, this is another example of the commission setting an interim rule just for access-stimulating local exchange carriers when it hasn't done its job on NetworkEdge or moved us all to bill and keep. [00:18:28] Speaker 03: But special interim rules are slapped on access-stimulators. [00:18:34] Speaker 03: and thus the order should be vacated. [00:18:39] Speaker 03: Naya, see you over my time. [00:18:41] Speaker 04: Are there any further questions from the panel? [00:18:46] Speaker 02: No, thank you. [00:18:47] Speaker 04: All right, we'll give you some time on rebuttal, Ms. [00:18:51] Speaker 04: Coppola, and we'll hear from Council for the FCC, Mr. Carr. [00:19:00] Speaker 05: Good morning, Your Honors. [00:19:01] Speaker 05: May it please the Court, my name is James Carr. [00:19:03] Speaker 05: I represent the Federal Communications Commission. [00:19:08] Speaker 05: Let me start with petitioners' argument that they feel that they are being singled out here by the Commission. [00:19:15] Speaker 05: And they point to a reference in the order to evidence that there were 21 carriers engaged in access stimulation. [00:19:25] Speaker 05: I'd like to bring the Court's attention to paragraph 101 of the order. [00:19:30] Speaker 05: Joint Appendix 1318. [00:19:31] Speaker 05: As the commission explains, that reference to 21 carriers was meant to be illustrative. [00:19:40] Speaker 05: And the commission says at the end of paragraph 101, although this order cites illustrative examples of the types of traffic and types of carriers that have been the focus of many acts of stimulation disputes, the rules we adopt apply by their terms whenever they are triggered without regard to the content or type of traffic [00:19:58] Speaker 05: e.g. [00:19:58] Speaker 05: conference calling traffic or otherwise. [00:20:00] Speaker 00: Council, may I ask you a question? [00:20:03] Speaker 00: May I ask a question? [00:20:04] Speaker 00: Yes, Your Honor. [00:20:06] Speaker 00: How do you describe an access stimulator? [00:20:09] Speaker 00: What's the definition? [00:20:12] Speaker 05: An access stimulator is engaged in an arrangement with a high volume calling provider to stimulate terminating traffic. [00:20:23] Speaker 05: in order to increase the access charge revenues that it is receiving. [00:20:30] Speaker 00: The six to one is the remedy that you came up with, right? [00:20:35] Speaker 00: But what is the definition of the access stimulator? [00:20:43] Speaker 05: For purposes of applying these particular measures, the six to one was meant to be a screen [00:20:52] Speaker 00: Dividing the access stimulator from other carriers that might have so the six to one ratio is the definition of access stimulator It's in I thought I read as I read the order. [00:21:04] Speaker 00: I thought there was an implicit assumption and that access stimulators were defined somehow otherwise and six to one was a remedy and [00:21:14] Speaker 00: to deal with them. [00:21:15] Speaker 05: Yes, that's right. [00:21:16] Speaker 00: So therefore, what was the definition of access stimulator before you came up with a six to one as the remedy? [00:21:23] Speaker 05: Well, the definition of access stimulator is a carrier engaged in arrangements with high volume calling providers to stimulate terminating traffic in order to artificially increase the access. [00:21:37] Speaker 00: But how high? [00:21:39] Speaker 00: How high? [00:21:41] Speaker 05: Well, that's where the six to one ratio. [00:21:44] Speaker 00: Well, no, but you see the thing that puzzles me is the 61, was the 61 the definition or the remedy? [00:21:52] Speaker 00: In other words, Petitioner argues you just decided the 21 companies were bad guys and we're going to levy remedies to deal with them. [00:22:05] Speaker 00: But why were they the bad guys? [00:22:07] Speaker 00: Well, how did you define them as bad guys? [00:22:11] Speaker 05: Well, the commission didn't actually speak to those 21 carriers in particular, but it talked about access stimulation practices, for example, in paragraph 45 of the order. [00:22:26] Speaker 05: In the past, access stimulation had been accomplished through these revenue sharing agreements. [00:22:31] Speaker 05: What the commission found after it adopted the 2011 rules [00:22:36] Speaker 05: which prohibited access stimulation through revenue sharing agreements was that carriers were involved in other arrangements to try to stimulate access. [00:22:46] Speaker 05: For example, an access stimulating carrier that is co-owned with a high volume calling service provider could retain the stimulated access revenues for itself while letting the high volume calling service provider operate at a loss. [00:23:01] Speaker 05: This was another way in which [00:23:03] Speaker 05: access stimulating carriers could work with high volume customers to stimulate access. [00:23:10] Speaker 02: Mr. Carr, I mean, you know, we use this term access stimulation, but I mean, presumably this is just activity that is rational and revenue generating given the FCC's existing regulatory scheme, right? [00:23:27] Speaker 02: So these companies are making a profit because of [00:23:32] Speaker 02: the rules that the FCC has set in place and the marketplace that they have created, which creates an incentive to make money in this way. [00:23:41] Speaker 02: So why is that unjust or unreasonable when it's within the rules that the FCC has set? [00:23:49] Speaker 05: Because I think, Your Honor, what the commission was pointing out was that these carriers are attempting to stimulate access to increase the access charge revenues [00:24:01] Speaker 02: into which that activity is lawful under the existing rules. [00:24:06] Speaker 02: Like there's nothing unlawful about what they're doing under the FCC's own rules. [00:24:12] Speaker 02: Isn't that correct? [00:24:14] Speaker 05: But the commission has made a decision in moving to bill and keep to get rid of these access charge subsidies. [00:24:20] Speaker 05: And the commission's view is that if these carriers are attempting to [00:24:26] Speaker 05: stimulate access to increase the number of subsidies they're getting, which are above cost subsidies. [00:24:31] Speaker 00: Council, isn't your answer to Judge Rao that you're not taking the position that the prior practices were illegal. [00:24:40] Speaker 00: You're taking the position that they were unsound for economic reasons and therefore you want to change it. [00:24:47] Speaker 00: But you're not taking the position the prior practices were illegal. [00:24:51] Speaker 05: Well, we have found, Your Honor, that it was an unjust and unreasonable practice. [00:24:54] Speaker 02: I mean, they do. [00:24:55] Speaker 02: You're specifically acting under your authority to regulate what you say are unjust and unreasonable. [00:25:01] Speaker 00: That's a fair point. [00:25:03] Speaker 02: Even though those practices are consistent with the just and reasonable rates that the Commission has set. [00:25:11] Speaker 02: They are, but the commission so i'm not sure like what the gap is between you know why something is unjust and unreasonable if it is in compliance with rates that the Commission has set as being just and reasonable. [00:25:25] Speaker 05: Well, the Commission has has is moving toward getting rid of these access charges, because, in fact, it has found that. [00:25:33] Speaker 05: These subsidies are inconsistent with efficient competition under the Communications Act. [00:25:39] Speaker 05: And the commission points to that in paragraph 26 of JA 1287. [00:25:45] Speaker 05: Competition suffers because access stimulation revenues subsidize the costs of high volume calling services, granting providers of those services a competitive advantage over companies that collect such costs directly from their customers. [00:25:59] Speaker 05: The commission was trying to address this particular problem. [00:26:03] Speaker 05: It didn't seem fair to have these carriers working with their high volume customers and gaining an advantage over other conference calling companies by being able to subsidize their arrangements. [00:26:18] Speaker 05: And as they themselves acknowledge in page 20 of their reply brief, they talk about their business model. [00:26:27] Speaker 05: Free conferencing services are set up so that the conference is free to the organizer. [00:26:32] Speaker 05: And each consumer pays its long-distance fees for the call. [00:26:36] Speaker 05: Essentially, these services are being subsidized by the long-distance carriers and their customers. [00:26:43] Speaker 05: And the commission believed that that was an unfair competitive practice. [00:26:48] Speaker 05: And given the fact that the commission is moving away from the access charge model, that it will ultimately transition to bill and keep for all carriers, [00:26:56] Speaker 05: It felt the need to take action now to prevent carriers from taking advantage of these access charges while they remain in effect. [00:27:07] Speaker 00: By the access charges, you're including the basic access charge plus the transportation charge plus the tandem switching. [00:27:15] Speaker 00: Is that correct? [00:27:17] Speaker 05: Yes, Your Honor, access charges apply to various elements of the there were there were access charges for terminating end office switching. [00:27:27] Speaker 05: Those at this point have already moved to Bill and keep forever. [00:27:31] Speaker 05: Right. [00:27:32] Speaker 05: There are terminating tandem switching and transport charges. [00:27:36] Speaker 05: There are originating access charges and the commission in October of 2020 began to move at least some of those originating charges toward Bill and keep moved [00:27:46] Speaker 05: started a three-year transition plan for originating charges related to toll-free number services. [00:27:54] Speaker 05: The idea is, and the commission discusses this at paragraph 100 of the order on page JA 1318, that this particular rule is part of an overarching approach to this problem. [00:28:13] Speaker 05: We're trying to move toward transition toward [00:28:16] Speaker 05: bill and keep, but we're moving in phases. [00:28:20] Speaker 05: And so the fact that some carriers are now taking their own financial responsibility for some of these charges and others are not, is not inconsistent with reciprocal compensation ultimately because the commission is moving toward a bill and keep regime where all carriers will be responsible for their own charges. [00:28:43] Speaker 05: I will point out, for example, that [00:28:45] Speaker 05: Price cap incumbent carriers, as of July 2018, are already on bill and keep for these terminating tandem switching and transport charges. [00:28:56] Speaker 00: So in that regard- Does that mean under bill and keep, there'll still be an access charge, won't there? [00:29:04] Speaker 00: No, there will not, your honor. [00:29:05] Speaker 00: No access charge at all. [00:29:07] Speaker 00: I'm not talking about transportation or tandem switching and so forth. [00:29:11] Speaker 00: Will there be no access charge at all? [00:29:13] Speaker 05: For Bill and Keepe, there will be no access charge. [00:29:16] Speaker 05: The terminating carrier will recover its costs from its own end users. [00:29:22] Speaker 05: That's the idea of Bill and Keepe. [00:29:26] Speaker 00: I see. [00:29:27] Speaker 00: So they'll eliminate all under Bill and Keepe. [00:29:30] Speaker 00: When you get there, there'll be no access charges at all. [00:29:33] Speaker 05: There will be no tariffed access charges. [00:29:36] Speaker 05: Now, the petitioners pointed out in their reply brief [00:29:40] Speaker 05: and the commission agrees, there could be access charges that are negotiated between the long distance carrier. [00:29:47] Speaker 00: That's what Puzzler means. [00:29:49] Speaker 05: But that's a, it's not tariffed, it's not related to the commission's overarching scheme of subsidizing service, subsidizing universal service, which has been part of the access charge regime from its beginning. [00:30:06] Speaker 05: Congress as part of the 1996 Telecommunications Act directed the commission to move toward a more explicit subsidy system, anticipating that there would be free market competition in these local markets and that implicit subsidies would no longer work. [00:30:23] Speaker 05: And the commission is moving toward the commission's 2011 order addressing universal service and inter-carrier compensation reform [00:30:33] Speaker 05: was designed to move toward that goal of eliminating implicit subsidies. [00:30:41] Speaker 04: All right. [00:30:41] Speaker 04: Any other questions from the panel? [00:30:46] Speaker 04: All right. [00:30:47] Speaker 04: Thank you, Mr. Carr. [00:30:49] Speaker 04: Ms. [00:30:52] Speaker 04: Coppola, you were out of time, but we'll give you two minutes on rebuttal. [00:30:58] Speaker 00: Excuse me, Presiding Judge. [00:30:59] Speaker 00: Wasn't there an intervener? [00:31:04] Speaker 04: There was, but I don't believe that the intervener requested argument time. [00:31:08] Speaker 03: Oh, thank you. [00:31:12] Speaker 03: Thank you, Your Honors. [00:31:14] Speaker 03: May I proceed? [00:31:16] Speaker 04: Yes, please. [00:31:18] Speaker 03: You heard this morning the FCC's counsel try to answer the question about how is access stimulation defined? [00:31:26] Speaker 03: And we heard some [00:31:29] Speaker 03: explanation of arrangements with high volume calling applications, but that is not the definition. [00:31:37] Speaker 03: The definition is set by statute or by regulation rather, but 47 CFR 61.3 BBB. [00:31:48] Speaker 03: And that is the definition that was amended in 2019. [00:31:53] Speaker 03: And that definition is this six to one [00:31:56] Speaker 03: ratio. [00:31:57] Speaker 00: So the 6 to 1 ratio is the actual definition of an access stimulant. [00:32:03] Speaker 03: That's right. [00:32:04] Speaker 03: And if you're a judge and if you fall under that 6 to 1 here, which again is targeted at a smaller carrier, you get penalized. [00:32:16] Speaker 03: this, we've heard a lot about trying to move to Billingkeep, try, try, try, we're going to get there. [00:32:23] Speaker 03: And that was something that the commission articulated in 2011. [00:32:26] Speaker 03: And instead of moving us to Billingkeep, where there is uniformity in each network, incurring the cost of sending calls on its own here, it's, it's asymmetrical. [00:32:40] Speaker 03: It's buy in giveaway. [00:32:42] Speaker 03: If you get pegged with that six to one ratio, [00:32:45] Speaker 03: And I also point out that the six to one ratio. [00:32:50] Speaker 03: It's been it's been applied so that anyone else caught in its net have been released. [00:32:56] Speaker 03: So as we all know, high volume crawling is here to stay, particularly post COVID and recently the Commission waived [00:33:06] Speaker 03: a large urban carrier who fell into the six to one net. [00:33:11] Speaker 00: Counsel, I don't think that's properly before us. [00:33:14] Speaker 00: I know you cite the Amico case, but if you read the footnote on that case and the rest of the case, that was dicta and it was not the holding of the court. [00:33:24] Speaker 00: We have consistently taken the position that events that take place after the rulemaking are not before us if there's a facial challenge to the rulemaking. [00:33:35] Speaker 03: Your honor, it is a fact that we believe demonstrates the, we're not appealing the order, we are demonstrating a fact of the anti-competitive impacts. [00:33:48] Speaker 00: It's a fact that was not brought before the FCC in this case, because it couldn't have been, it happened afterwards, and it's not before us. [00:33:57] Speaker 03: I believe, your honor, that the other cases that we cited in the 10th Circuit [00:34:02] Speaker 03: demonstrate or provide precedent where the court can consider the facts that illuminate what the commission was doing here. [00:34:13] Speaker 04: All right. [00:34:13] Speaker 04: Thank you, counsel. [00:34:14] Speaker 04: We have your argument. [00:34:15] Speaker 04: We'll take the case under submission.