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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska Exchange Carriers Association, Inc. v. Regulatory Commission of Alaska (02/27/2009) sp-6339
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| ALASKA EXCHANGE CARRIERS | ) |
| ASSOCIATION, INC., | ) |
| ) Supreme Court No. S- 12696 | |
| Appellant, | ) |
| ) Superior Court No. 3AN-07- 4126 CI | |
| v. | ) |
| ) O P I N I O N | |
| ) | |
| REGULATORY COMMISSION OF | ) No. 6339 - February 27, 2009 |
| ALASKA, | ) |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Sen K. Tan, Judge.
Appearances: Robin O. Brena, Anthony S.
Guerriero, David W. Wensel, Brena, Bell &
Clarkson, P.C., Anchorage, for Appellant.
Robert E. Stoller, Assistant Attorney
General, Anchorage, Talis J. Colberg,
Attorney General, Juneau, for Appellee
Regulatory Commission of Alaska. Martin
Weinstein, General Communication, Inc.,
Anchorage, for Appellee GCI. A. William
Saupe, Ashburn & Mason, Anchorage, for
Appellee Alascom, Inc.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Carpeneti, and Winfree, Justices.
WINFREE, Justice.
I. INTRODUCTION
A local telephone company proposed moving its first
point of switching for routing telephone traffic. Two long-
distance carriers affected by the proposal opposed the change,
and an association of local telephone companies sought to
intervene in the ensuing regulatory proceeding. The agency
denied intervention, the superior court affirmed, and the
association appeals. We affirm denial of intervention because
the agency reasonably concluded that the association did not
qualify for mandatory intervention and did not abuse its
discretion in denying permissive intervention.
II. FACTS AND PROCEEDINGS
Long-distance telephone companies (interexchange
carriers, or IXCs) need the facilities of local telephone
companies (local exchange companies, or LECs) to originate and
terminate intrastate toll calls.1 Prior to 1989 long-distance
carriers compensated local telephone companies for use of their
facilities through a settlements process.2 In 1989 the Alaska
Public Utilities Commission, predecessor to the Regulatory
Commission of Alaska (collectively, Commission), created the
Alaska Exchange Carriers Association, Inc. (AECA), an association
of local telephone companies.3 Creation of AECA represented a
shift from the settlements process to one involving tariffed
access charges.4
Under the old settlements process, each long-distance
telephone company negotiated with each local carrier
individually.5 Under the new system, AECA calculates a single
access charge tariff for all of its members.6 The tariff:
[R]efers to the contract of the 21 members of
AECA wherein they agree to share facilities and
services with intrastate long-distance companies,
related to long-distance calls originating from or
coming into Alaska. The tariff also lays out a
system of access charges that the local carriers
charge the long-distance carriers for use of their
networks.
In October 2006 AECA member Interior Telephone Company,
Inc. petitioned for authorization to move its first point of
switching, following procedures outlined in AECAs tariff. The
first point of switching is:
The first exchange carrier location at which
switching occurs on the terminating path of a call
proceeding from the IXC terminal location to the
terminating end office, or the last exchange
carrier location at which switching occurs on the
originating path of a call proceeding from the
originating end office to the IXC terminal
location.[7]
Put another way, a switch is a device that routes telephone
traffic, and the first point of switching, or FPOS, is the
physical point where a local AECA member company interconnects
with an interstate long-distance service provider. According to
Interior Telephone, moving the FPOS would benefit consumers by
making additional services available in a cost-efficient manner.
Two long-distance telephone companies, GCI Communication Corp.
d/b/a General Communication, Inc. and Alascom, Inc. d/b/a AT&T
Alascom, opposed Interior Telephones proposed FPOS change partly
because they believed it would impermissibly shift some costs to
them.
The Commission designated GCI and AT&T as parties to
the regulatory proceeding without requiring petitions to
intervene, noting that AECAs tariff anticipates that objecting
access customers will participate in a proceeding before the
commission. The Commission further stated: We require any
interested person wishing to file a petition to intervene in this
proceeding to file that petition by October 20, 2006. Our
criteria for evaluating petitions to intervene are set out at 3
AAC 48.110.8
AECA timely filed a petition to intervene, arguing that
under 3 AAC 48.110 it had a statutory right to intervene or it
qualified for permissive intervention. Interior Telephone
supported the petition; GCI and AT&T each filed an opposition.
On November 30 the Commission denied AECAs petition to
intervene, likening the case to Docket U-99-81, in which the
Commission had previously decided AECA neither had a statutory
right to intervene nor qualified for permissive intervention.9
On December 12 AECA filed a petition for reconsideration and
moved for expedited consideration. On December 20 Interior
Telephone filed a memorandum supporting AECAs petition; that same
day, GCI and AT&T each filed an opposition.
On December 28 the Commission granted AECAs motion for
expedited consideration but denied its petition for
reconsideration. The Commission reiterated that AECA had no
statutory right to intervene and that permissive intervention was
not warranted. AECA appealed to the superior court, and Superior
Court Judge Sen K. Tan affirmed denial of AECAs intervention
motion in April 2007.
In June 2007 the Commission held a public hearing on
Interior Telephones petition to change the FPOS. The Commission
denied the petition in October.
AECA appeals the denial of intervention.
III. STANDARD OF REVIEW
When a superior court acts as an intermediate court of
appeals, we independently review the administrative decision.10
Where questions of law do not involve agency expertise, the
appropriate standard of review is substitution of judgment; where
agency expertise is implicated, the rational basis standard
applies.11 Under the substitution of judgment standard, we make
our own legal interpretations.12 Under the rational basis
standard, we defer to agency interpretation if it is supported by
the facts and has a reasonable basis in law.13 We review an
agencys application of its own regulations for whether the
agencys decision was arbitrary, unreasonable, or an abuse of
discretion.14 Findings of fact are reviewed for clear error under
the substantial evidence standard.15 Findings are upheld if they
are supported by relevant evidence that a reasonable person might
accept as adequate to support them.16
Here, the proper standards of review are (1) rational
basis for whether AECA qualifies for intervention as a matter of
right under 3 AAC 48.110, because the Commission is in a superior
position to interpret its own regulation, and (2) abuse of
discretion for whether AECA qualifies for permissive intervention
under 3 AAC 48.110, because the Commission is applying its own
regulation to the facts of the case.
IV. DISCUSSION
A. Arguments and Rulings Below
AECA first argues that it has a statutory right to
intervene under 3 AAC 48.110(a), which provides: Any person who
has a statutory right to be made a party . . . will be permitted
to intervene. AECA concedes that there is no express provision
of the Utilities Act stating that a utility or its ratepayers may
be heard with regard to issues arising under a tariff. But
according to AECA, the basic tenet, that a party may be heard
with regard to disputes arising under its own tariff, is implied
in virtually every tariff-related provision of the Utilities Act.
AECA argues that the issues in this case affect AECA as a whole,
as well as AECAs tariff, AECAs billing and collection of access
charges, AECAs distribution of access charge revenues, and AECAs
twenty other member companies.
AECA also argues that it qualifies for permissive
intervention under another portion of 3 AAC 48.110(a), which
provides: Any person whose intervention will be conducive to the
ends of justice and will not unduly delay the conduct of the
proceeding will, in the commissions discretion, be permitted to
intervene. 3 AAC 48.110(b) specifies seven permissive
intervention factors:
In passing upon a petition to intervene, the
following factors, among others, will be
considered:
(1) the nature of the petitioners right under
statute to be made a party to the proceeding;
(2) the nature and extent of the property,
financial, or other interest of the petitioner;
(3) the effect on petitioners interest of the
order which may be entered in the proceeding;
(4) the availability of other means by which the
petitioners interest may be protected;
(5) the extent to which petitioners interest will
be represented by existing parties;
(6) the extent to which petitioners participation
may reasonably be expected to assist in the
development of a sound record, including the
issues that petitioner intends to address in the
proceeding; and
(7) the extent to which participation of the
petitioner will broaden the issue or delay the
proceeding.
The Commission found the facts and circumstances of
this case substantially identical to those in Docket U-99-81 and,
for the same reasons as in that case, denied AECAs petition. The
local telephone company in Docket U-99-81 had moved its first
point of switching from North Pole to Fairbanks.17 The tariff
then in effect required local and long-distance carriers to agree
to change the first point of switching, but the carriers had not
reached an agreement.18 AECA attempted to intervene, arguing as
it does in this case that it had a statutory right to intervene
in any proceeding in which the interpretation and application of
its tariff is at issue.19 The Commission rejected that argument.20
The Commission considered the permissive intervention factors of
3 AAC 48.110(b), but denied AECAs motion to intervene, noting
that: (1) neither AECAs property nor financial interests were
affected; (2) although AECAs input could arguably assist the
Commission, proper interpretation of the tariff was within the
Commissions purview; (3) AECAs participation could not reasonably
assist in developing a sound record because the local and long-
distance carriers already had presented both sides of the issue;
and (4) AECAs participation could actually delay proceedings.21
The Commission also noted that AECA fail[ed] to
acknowledge [the order in Docket U-99-81] in its petition. In
denying AECAs subsequent motion for reconsideration, the
Commission stated that AECA had no statutory right to intervene
and that intervention based on the discretionary intervention
factors was not warranted.
The superior court affirmed the Commissions decision,
first reiterating that no express statutory right of intervention
existed. The court reasoned that whether the term statutory in
3 AAC 48.110(a) encompassed implied statutory rights was a matter
of the Commissions interpretation of its own regulations, and
thus subject to the reasonable basis standard of review. The
court concluded that [b]ased on the language of the regulation, a
reasonable basis existed for the Commission to deny AECA
intervention.
The court then stated that while some permissive
intervention factors weighed in favor of allowing intervention,
others weighed against it, and it concluded the Commission had
not abused its discretion in denying AECAs motion for permissive
intervention. The court noted that the only section of the
tariff at issue was 2.6, which deals only with obligations of
the parties before a petition is filed, and that the tariff did
not address what happens after the petition is filed with the
Commission. Thus, the court reasoned, the tariff is really not
central to the issue currently before the Commission. Rather,
the docket is concerned with how the Commission will decide the
FPOS issue.
B. The Commission Reasonably Concluded that AECA Does Not
Qualify for Express or Implied Mandatory Intervention.
AECA concedes it has no express statutory right to
intervene, but asserts that a regulated entity is automatically
given party status in a proceeding in which its own tariff is at
issue without the need to intervene at all. AECA relies on
603(b) of the Commissions access charge manual22 and 1.3 of
AECAs tariff to support this assertion.23 AT&T contends that the
access charge manual and relevant statutory and regulatory
authority evince a narrow role for AECA, focused exclusively on
assessing, collecting, and distributing access charges. GCI and
the Commission make similar arguments.
AECAs argument fails because its role is essentially
that of an administrator. The Alaska Public Utilities Regulatory
Act24 authorized the Commission to form an association to assist
in administering the system of access charges.25 When the
Commission created AECA in 1989, it stated:
[We believe] that organization of an ECA will
be of significant benefit in the development,
implementation, and administration of access
charges. The ECA will have primary responsibility
for preparing, filing, and supporting the single,
statewide average access charge tariff required by
the Commission and for recommending ratios for
distributing resultant revenues to the LECs.
Further, the ECA will handle the functions of
collecting the approved rates and distributing the
carrier access revenues pursuant to the approved
distribution ratios and other applicable
Commission rules. The ECA will also have
monitoring report filing responsibilities and
other obligations to its members. . . .
None of the foregoing functions of the ECA
involve any delegation by the Commission of its
duties and powers. The Commission, not the ECA,
will approve tariffs for, and rules governing,
access charges and ratios for appropriate
distribution of access charge revenues among
LECs.[26]
A change in FPOS relates to AECAs tariff only in the
sense that AECA will need to prepare, file, and distribute a
revised access charge. The statute authorizing AECAs creation
explicitly refers to AECAs role in administering access charges.27
The tariff language states that AECAs role is limited to billing
and collecting access charges, distributing access charge
revenues, and similar functions. The Commission expressly stated
that it did not cede any of its duties or powers to AECA.28 Thus,
although AECAs tariff is at issue in the sense that it provides
the context for the proposed change in FPOS, AECAs role as an
administrator is insufficient to warrant automatic party status
in the proceeding.29
AECA contends that proceedings before the Commission
involved considerable evidence on the proper application and
interpretation of AECAs tariff and that evidence concerning the
proper interpretation and application of AECAs FPOS provisions
was actually introduced in the underlying docket over the
objections of GCI and AT&T. Interpretation of the tariff was at
issue in those proceedings only insofar as ITC unsuccessfully
argued that the tariff contained standards relevant to the
Commissions decision on the proposed FPOS change.30 The
Commission flatly rejected this argument, noting that the tariff
merely provided for alternative dispute resolution procedures for
a proposed FPOS change, and that [o]nce a petition is filed, the
role of the tariff ends.31 Because the tariff was not actually at
issue, the Commissions decision that AECA did not have an implied
statutory right to participate in the proceedings is reasonable
in light of AECAs narrow administrative role.
AECA also asserts that its authorized activities are
nearly identical to those of the National Exchange Carrier
Association (NECA). The Federal Communications Commission (FCC)
has stated that NECA may freely express its views before [the
FCC] whenever it chooses to do so and that it would be an error
to restrict . . . the free expression of NECAs views in
proceedings before the FCC.32 NECAs role as an administrator is
indeed analogous to that of AECA. A National Regulatory Research
Institute report on NECA lists NECAs purposes as filing common
access charge tariffs for exchange carriers, administering access
charge revenue pools, and distributing the pool revenues.33
Regarding legal matters, the report states: NECAs functions are
confined to those activities related to the development and
filing of access charges and the collection and distribution of
access charge revenues, including involvement in related judicial
and regulatory proceedings. Any other activity is prohibited
unless prior Commission approval has been granted.34 Title 47 of
the Code of Federal Regulations supports the reports
characterization:
Section 69.603 Association functions.
(a) [NECA] shall not engage in any activity
that is not related to the preparation of
access charge tariffs or the collection and
distribution of access charge revenues or the
operation of a billing and collection pool on
an untariffed basis unless such activity is
expressly authorized by order of the [FCC].
(b) Participation in [FCC] or court
proceedings relating to access charge
tariffs, the billing and collection of access
charges, the distribution of access charge
revenues, or the operation of a billing and
collection pool on an untariffed basis shall
be deemed to be authorized [NECA]
activities.[35]
However, AECAs reliance on NECA is unpersuasive for two
reasons. First, the authority AECA cites does not expressly
provide NECA an unfettered right to intervene as a party in all
regulatory proceedings involving its members that may touch upon
its tariff,36 nor have we found any such authority.37 Second, the
Commission is not bound to follow the FCC. Thus the Commission
had a reasonable basis for concluding that AECA may not intervene
as a matter of right: no statute expressly provides for such a
right, and no implied right exists because AECAs role is limited
to administering the system of access charges.
C. The Commission Was Within Its Discretion To Deny AECA
Permissive Intervention.
AECA asserts that it meets the permissive intervention
criteria set out in 3 AAC 48.110(a) and (b). Specifically, AECA
claims that: (1) it has a direct interest in the tariffs
interpretation and application; (2) any Commission ruling
concerning the tariff will impact it and its members; (3) only
through intervention can it protect its interests; (4) no other
party can represent its unique interest or present its unique
perspective; (5) its institutional knowledge about development of
2.6 of the tariff will assist in developing a complete record;
and (6) far from intending to broaden the issue or delay
proceedings, it already had timely filed testimony and agreed to
an expedited procedural schedule.
Our inquiry is limited to whether the Commissions
application of the permissive intervention factors to the facts
of this case was arbitrary, unreasonable, or an abuse of
discretion.38 Although the Commissions initial ruling was limited
to analogizing this case to Docket U-99-81, in denying
reconsideration the Commission explicitly stated that AECA failed
to satisfy the second, sixth, and seventh permissive intervention
factors. It found AECAs claimed interest in the interpretation
and application of its tariff was insufficient, and although its
members property or financial interests may qualify them for
intervention, AECA as an organization has not demonstrated such a
property or financial interest. Additionally, the Commission
found AECAs institutional knowledge about adoption of 2.6 of the
tariff would not assist in developing a sound record and
intervention on the part of AECA to provide this institutional
knowledge may delay the proceeding. Those findings are not
clearly erroneous, and based on those findings, the Commission
reasonably denied AECAs petition to intervene.
V. CONCLUSION
Because the Commission reasonably concluded that AECA
does not qualify for mandatory intervention under 3 AAC 48.110,
and because the Commission did not abuse its discretion in
denying permissive intervention under that regulation, we AFFIRM
the denial of AECAs intervention in the underlying regulatory
proceeding.
_______________________________
1 See, e.g., Alaska Pub. Util. Commn, Re Intrastate
Access Charges & Subscriber Line Charges, 10 A.P.U.C. 34, 36-37
(1989).
2 Id.
3 See id. at 39.
4 Id. at 38. AS 42.05.830 provides for the establishment
of a system of access charges to be paid by long distance
carriers to compensate local exchange carriers for the cost of
originating and terminating long distance services.
5 Id. at 37.
6 Id. at 39. In Alaska, a tariff specifies the terms and
conditions under which a utility offers services to the general
public. AS 42.05.990(7).
7 Newtons Telecom Dictionary 393 (22d ed. 2006).
8 3 Alaska Administrative Code (AAC) 48.110(a) (2008)
provides:
Petitions for permission to intervene as a party
will be considered only in those cases that are to
be decided upon an evidentiary record after notice
and hearing. Any person who has a statutory right
to be made a party to that proceeding will be
permitted to intervene. Any person whose
intervention will be conducive to the ends of
justice and will not unduly delay the conduct of
the proceeding will, in the commissions
discretion, be permitted to intervene.
9 GCI Commcn Corp. v. Tel. Utils. of the Northland, Inc.,
Docket U-99-81, Order No. 1, at 12 (Regulatory Commn of Alaska,
Nov. 1, 1999).
10 E.g., Cook Inlet Pipe Line Co. v. Alaska Pub. Utils.
Commn, 836 P.2d 343, 348 (Alaska 1992) (citing Tesoro Alaska
Petrol. Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903 (Alaska
1987)).
11 Tesoro, 746 P.2d at 903 (citing, e.g., Matanuska-
Susitna Borough v. Hammond, 726 P.2d 166, 175-77 (Alaska 1986)).
12 Id.
13 Id.
14 Griffiths v. Andys Body & Frame, Inc., 165 P.3d 619,
623 (Alaska 2007) (quoting Hodges v. Alaska Constructors, Inc.,
957 P.2d 957, 960 (Alaska 1998)).
15 Matanuska Elec. Assn, Inc. v. Chugach Elec. Assn, Inc.,
53 P.3d 578, 583 (Alaska 2002) (citing Tlingit-Haida Regl Elec.
Auth. v. State, 15 P.3d 754, 761 (Alaska 2001)).
16 Amerada Hess Pipeline Corp. v. Regulatory Commn of
Alaska, 176 P.3d 667, 673 (Alaska 2008) (citing Alyeska Pipeline
Serv. Co. v. DeShong, 77 P.3d 1227, 1231 (2003)).
17 Docket U-99-81, supra note 9, at 12.
18 Id. at 10, 12.
19 Id. at 7.
20 See id. at 17.
21 Id. at 16-17.
22 Regulatory Commn of Alaska, Alaska Intrastate
Interexchange Access Charge Manual 603(b) (2006) available at
. The
manual provides: Participation in Commission or court
proceedings relating to the Associations access charge tariff,
the billing and collection of the Associations access charges, or
the distribution of the Associations access charge revenues shall
be deemed to be authorized Association activities.
23 Alaska Pub. Util. Commn Access Services Tariff 999 1.3
(1997), provides that AECA has the primary responsibility for
preparing, filing, and supporting this tariff; billing and
collecting access charges; handling disputes; and distributing
access charge revenues to the individual companies.
24 AS 42.05.
25 AS 42.05.850 provides: The commission may require the
local exchange carriers to form an association to assist in
administering the system of access charges and may require the
association to file tariffs and to engage in pooling of exchange
access costs and revenue if necessary . . . . A local exchange
carrier is any carrier certificated to provide local telephone
services. AS 42.05.890(1).
26 Intrastate Access Charges, supra note 1, at 39.
27 See AS 42.05.850.
28 Intrastate Access Charges, supra note 1, at 39.
29 AECA claims that 2.6 of its tariff authorizes
intervention. But that section merely requires local telephone
companies to give the Commission and access customers notice of
any proposed changes to the FPOS and delineates the process by
which access customers may object to proposed changes. Access
Services Tariff, supra note 23 at 2.6 (A-F).
AECA also points to Docket U-00-88, in which the
Commission allowed an oil company and two natural gas companies
to intervene because [c]ustomers of a public utility have a
statutory right to participate as a party [sic] in utility
proceedings and the companies would have had standing to seek
judicial review. In Re Investigation into 2000 Revenue
Requirement & Cost of Svc. Studies, Docket U-00-88, Order No. 2
at 4 (Regulatory Commn of Alaska, Feb. 5, 2001). Docket U-00-88
is distinguishable from this case because AECA is not a customer
of a public utility.
30 In Re Petition Filed by Interior Tel. Co., Inc. to
Implement a Proposed Network Change Under Alaska Exchange
Carriers Assn, Inc., Tariff Section 2.6(f), Docket U-06-109,
Order No. 10 at 3 (Regulatory Commn of Alaska, June 6, 2007).
31 Id. at 4.
32 In re Amendment & Clarification of Part 69 Rules
Governing the Natl Exch. Carrier Assn, 2 F.C.C.R. 381, 382
(1987).
33 Jane L. Racster, Natl Regulatory Research Inst., The
Natl Exch. Carrier Assn: Structure and Operation, 1-2 (1985).
34 Id. at 10.
35 47 C.F.R. 69.603(a)-(b) (2007).
36 See 2 F.C.C.R. at 381-85.
37 But see, e.g., In re C.F.Commcns Corp. v. Mich. Bell
Tel. Co., 12 F.C.C.R. 2134, 2144 (1997) (granting NECA leave to
intervene as amicus curiae).
38 Griffiths, 165 P.3d at 623 (quoting Hodges v. Alaska
Constructors, Inc., 957 P.2d 957, 960 (Alaska 1998)).
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