INTRODUCTION - California



Decision 17-08-016August 10, 2017 ASK Initials "Enter your initials in all CAPS (e.g. ATTY)" [/d "ATTY"]Initials \* MERGEFORMAT ASK AgendaNo "Enter the agenda item number (e.g. CA-4)" [/d "Agenda Item No."] \* MERGEFORMAT Before The Public Utilities Commission Of The State Of CaliforniaO1 Communications, Inc.(U6065C),Complainant,vs.New Cingular Wireless PCS, LLC (U3060C) and AT&T Mobility Wireless Operations Holdings, Inc. (U3021C),Defendants. FILLIN "Enter the caption for this decision. If there is more than one case, separate with hard returns." [/d "Caption"] \* MERGEFORMAT Case 15-12-020(Filed December 28, 2015) ORDER GRANTING REHEARING OF DECISION (d.) 16-09-005,AND VACATING THE DECISIONINTRODUCTIONIn Decision (D.) 16-09-005 (or “Decision”), we dismissed the complaint filed by O1 Communications, Inc. (“O1 Communications”) against New Cingular Wireless PCS, LLC and Mobility Wireless Operations Holdings, Inc. (“AT&T Mobility Wireless” or “Defendants”). The Decision found that O1 Communications had failed to set forth a cause of action upon which relief could be granted.The Complaint, filed on December 28, 2015, alleged violation of Public Utilities Code sections 451, 453(a), 558, and 709. (Complaint pp. 21-24.) On January 25, 2016, AT&T Mobility Wireless filed its answer to O1 Communications’ Complaint. In its answer to the Complaint, AT&T Mobility Wireless denied the allegations.On February 26, 2016, AT&T Mobility Wireless filed a Motion to Dismiss the Complaint (“Motion to Dismiss”), alleging O1 Communications had failed to identify any law or Commission order or rule that AT&T Mobility Wireless had violated, and therefore, had failed to state a claim for which relief may be granted. (Motion to Dismiss, p. 6.) The basis for AT&T Mobility Wireless’ allegation was that although O1 Communications seeks direct interconnection with AT&T Mobility Wireless, the Federal Communications Commission (“FCC”) rules permit AT&T Mobility Wireless to interconnect with carriers like O1 Communications either through direct or indirect interconnection. (Ibid.) O1 Communications filed a response to the Motion to Dismiss and AT&T Mobility Wireless filed a reply to O1 Communications’ response. The Administrative Law Judge (“ALJ”) held a Law and Motion hearing on April 18, 2016 regarding AT&T Mobility Wireless’ Motion to Dismiss.In accordance with the Scoping Memo and Ruling of Assigned Commissioner, as modified by the May 5, 2016 E-mail Ruling Regarding Response To Motion To Compel And Other Procedural Matters, the parties served Opening Testimony on July 1, 2016, Reply Testimony on July 15, 2016, and Rebuttal Testimony on July 22, 2016.Evidentiary hearings were not held, and a Proposed Decision (“PD”) was issued on July 25, 2016, addressing AT&T Mobility Wireless’ Motion to Dismiss. O1 Communications filed comments on the Proposed Decision on August 15, 2016 and then filed a Motion for Partial Summary Judgment on August 17, 2016. AT&T Mobility Wireless filed reply comments on the Proposed Decision on August 22.We issued D.16-09-005 on September 20, 2016, granting AT&T Mobility Wireless’ Motion to Dismiss on the grounds that O1 Communications had failed to set forth a cause of action upon which relief could be granted. The Decision was based on the fact that the FCC does not require AT&T Mobility Wireless to interconnect directly with carriers like O1 Communications. (D.16-09-005, p. 11.)O1 Communications timely filed an application for rehearing of D.16-09-005. In its rehearing application, O1 Communications alleges the following: (1) D.16-09-005 failed to apply the appropriate standard for a motion to dismiss, which requires that the Commission accept all facts pled in the Complaint as true; (2) the Decision failed to consider all undisputed material facts in the record in dismissing O1 Communications’ discrimination claim; (3) the Commission improperly treated O1 Communications’ first cause of action as a condition precedent to each of O1 Communications’ additional causes of action; (4) the Decision denied O1 Communications its due process right to be heard, by not holding an evidentiary hearing; and (5) the Commission erred in dismissing the Complaint on the basis of the purported precedential value of this case. AT&T Mobility Wireless filed a response to O1 Communications’ rehearing application on November 4, 2016.We have reviewed each of the issues raised in the rehearing application, and are of the opinion that rehearing of D.16-09-005 should be granted. For the reason stated below, we determine that we should not have granted the Motion to Dismiss, filed by AT&T Mobility Wireless. With the grant of rehearing, we vacate D.16-09-005. We also deny the motion requesting official notice.DISCUSSIONIn its rehearing application, O1 Communications alleged that the Commission failed to apply the correct standard for a motion to dismiss. (Rehrg. App., pp. 3-6.) Specifically, it argued that the Decision failed to accept all facts plead in the Complaint as true. (Rehrg. App., pp. 5-6.)When evaluating a motion to dismiss, we have found that:On a motion to dismiss a complaint, the legal standard against which the sufficiency of the complaint is measured is whether, taking the well-pleaded factual allegations of the complaint as true, the defendant is entitled to prevail as a matter of law. . . . [Citations.]. . . After accepting the facts as stated, the Commission then merely looks to its own law and policy. The question becomes whether the Commission and the parties would be squandering their resources by proceeding to an evidentiary hearing when the outcome is a foregone conclusion under the current law and policy of this Commission.(Re Western Gas Resources-California, Inc. (“Western Gas Resources”) [D.99-11-023] (1999) 3 Cal.P.U.C.3d 297, 301.)To determine whether a complaint is well-pleaded, the Commission has looked to section 1702. Pursuant to section 1702, a complaint must set forth an “act or thing done or omitted to be done by any public utility, including any rule or charge heretofore established or fixed by or for any public utility, in violation, or claimed to be in violation, of any provision of law or of any order or rule of the Commission.” Thus, section 1702 describes a two-pronged test: a complaint must allege (1) an act by a public utility, and (2) a violation of law or Commission order or rule. (See Pub. Util. Code, § 1702.)In its Complaint, O1 Communications alleged that AT&T Mobility Wireless discriminated against O1 Communications when it offered preferential terms and rates for direct interconnection to other customers and refused to offer those same terms and rates for direct interconnection to O1 Communications, in violation of section 453(a). (Complaint, p. 24.)Section 453(a) states:No public utility shall, as to rates, charges, service, facilities, or in any other respect, make or grant any preference or advantage to any corporation or person or subject any corporation or person to any prejudice or disadvantage.(Pub. Util. Code, § 453, subd. (a).) Based on the allegations set forth in the Complaint, O1 Communications did satisfy the two-prong test set forth in section 1702.Because O1 Communications has satisfied the two-pronged test for a well-pleaded complaint, we would next look at the facts in the Complaint to determine whether the facts actually state a cause of action on which relief may be granted. The facts allege that AT&T Mobility Wireless discriminated against O1 Communications by providing other telephone corporations preferential treatment in violation of section 453(a). If we assume the facts are true for purposes of determining whether to grant the motion to dismiss, then discriminatory treatment by a public utility in violation of section 453(a) is a cause of action on which relief may be granted. (Complaint, p. 24.) According to the legal standard, if we were to take the well-pleaded facts as true, the Defendants are not entitled to prevail as a matter of law.By finding that the Complaint failed to state a cause of action for which relief can be granted because no FCC rule had been violated, the Decision inadvertently and unintentionally impacted on our jurisdiction to regulate telecommunications carriers in the enforcement of violations involving discrimination and unjust and unreasonable rates set forth in the Public Utilities Code. Thus, the Decision misapplied the FCC rule to dismiss the case.Specifically, although the FCC rule permits both direct and indirect interconnection, the Decision erred in concluding that the lack of any violation of a FCC rule invalidates the statutory provisions in the Public Utilities Code that provide the Commission with broad authority to address discriminatory acts and unjust and unreasonable rates. Even if we assume the Commission lacks jurisdiction to order AT&T Mobility Wireless to interconnect directly with O1 Communications, we have authority to grant other types of relief if we were to find that there are violations of the Public Utilities Code and Commission rules. Accordingly, the Decision erred in dismissing the Complaint for failure to state a claim for which relief can be granted.In its rehearing application, O1 Communications specifically sought relief on its discrimination claim. All four of the allegations in the Complaint are interrelated. They all address rates and terms offered to O1 Communications relative to the rates and terms offered to other carriers. Thus, rehearing is granted on all of the causes of action raised in the Complaint. Further, with the grant of rehearing, we vacate D.16-09-005. By granting rehearing in today’s decision, we do not intend to prejudge the merits of any of the allegations in the Complaint.Because we are granting rehearing and vacating the Decision, we will not address the merits of the other issues raised in the Application for Rehearing.MOTION FOR OFFICIAL NOTICEOn December 22, 2016, O1 Communications filed a motion requesting that we take official notice of certain language in D.16-12-025, involving general policy statements about competition in the telecommunications industry and whether workshops should be held to solicit feedback on the interconnection resolution process. Nothing in the cited language is relevant to the specific issues raised in this Application for Rehearing. Thus, O1 Communications’ motion for official notice is denied.CONCLUSIONFor the reasons stated above, we grant rehearing of D.16-09-005. With the grant of rehearing, D.16-09-005 is vacated.THEREFORE, IT IS ORDERED that:1.Rehearing of D.16-09-005 is granted.2.D.16-09-005 is vacated.3.O1 Communications’ motion requesting that the Commission take official notice of D.16-12-025 is hereby denied.3.Case (C.) 15-12-020 shall remain open.4.The Executive Director will cause to be served today’s decision upon all the parties to the service list in C.15-12-020.5.The Assigned ALJ will issue a ruling to schedule a prehearing conference, as necessary, and to set up a schedule for the consideration of the Complaint.This order is effective today.Dated August 10, 2017, at San Francisco, California.MICHAEL PICKER PresidentCARLA J. PETERMANLIANE M. RANDOLPHMARTHA GUZMAN ACEVESCLIFFORD RECHTSCHAFFEN Commissioners ................
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