The opinion of the court was delivered by: Marvin Katz, S. Judge.
Now before the court is the motion to dismiss submitted by
defendants the Pennsylvania Public Utility Commission (PUC) and
Commissioners John M. Quain, Robert K. Bloom, Nora Mead Brownell,
and Aaron Wilson, Jr., as well as the motion for judgment on the
pleadings submitted by intervening state senators Vincent J.
Fumo, Roger A. Madigan, and Mary Jo White. The motions seek
dismissal of this action on the grounds of Eleventh Amendment
immunity or, in the alternative, abstention in light of ongoing
state court proceedings. In addition, the motions seek to dismiss
as untimely the crossclaims of intervenors MCI WorldCom Network
Services, Inc. and MCImetro Access Transmission Services, LLC
(collectively, Worldcom), and the crossclaims of intervenors
AT & T Communications of Pennsylvania, Inc., TCG Pittsburgh,
and TCG Delaware Valley, Inc. (collectively, AT & T). Finally,
the motions seek dismissal of counts four and five of plaintiff
Bell Atlantic-Pennsylvania's (Bell) complaint, as well as part
of Worldcom & AT & T's claims, for failure to state a claim upon
which relief can be granted.*fn1
Additional intervenors in this action are Sprint Communications
Company and the United Telephone Company of Pennsylvania
(collectively, Sprint), and the United States. Sprint did not
take a position on either motion. The United States intervened
for the purpose of defending the constitutionality of the
Telecommunications Act of 1996 (TCA).
A. Telecommunications Act of 1996
This case involves the provisions of TCA that seek to
foster competition in local telecommunications services.*fn2
See 47 U.S.C. § 251-52.
Until the 1990s, local phone service was thought to
be a natural monopoly. States typically granted an
exclusive franchise in each local service area to a
local exchange carrier (LEC), which owned, among other
things, the local loops (wires connecting telephones
to switches), the switches (equipment directing calls
to their destinations), and the transport trunks (wires
carrying calls between switches) that constitute a
local exchange network.
AT & T Corp. v. Iowa Utils., Bd., 525 U.S. 366, 371 (1999). Bell,
the plaintiff, is an incumbent LEC.
The TCA attacks the regulatory protections that sheltered
local telephone monopolies by preempt[ing] all state and
local legal barriers to entry into the local telephone market,"
including the state-sanctioned exclusive franchises formerly
enjoyed by incumbent LECs. Bell Atlantic-Del., Inc. v. McMahon,
80 F. Supp.2d 218, 222 (D. Del. 2000) (citing 47 U.S.C. § 253(a)).
Through sections 251 and 252, TCA also attempts to alleviate
economic barriers, recognizing that an incumbent LEC's network
provides it with a competitive advantage because the cost of
constructing a new, wholly redundant network is generally
prohibitive. See, e.g., id.; MCI Telecomm. Corp. v. Illinois Bell
Tel. Co., ___ F.3d ___, 2000 WL 1010863, at *2 (7th Cir. July 24,
2000). To that end, the TCA subjects incumbent LECs to "a host of
duties intended to facilitate market entry" including "the LEC's
obligation under 47 U.S.C. § 251(c) . . . to share its network
with competitors." Iowa Utils. Bd., 525 U.S. at 371. Section
251(c) provides three ways a competitor can gain access to an
incumbent LEC's network: "It can purchase local telephone
services at wholesale rates for resale to end users; it can lease
elements of the incumbent's network `on an unbundled basis'*fn3
and it can interconnect its own facilities with the incumbent's
network."*fn4 Id. The TCA also requires an incumbent LEC to
allow a competitor to collocate "equipment necessary for
interconnection or access to unbundled network elements."
47 U.S.C. § 251(c)(6).
The Act requires that an incumbent LEC and any competitor
negotiate an agreement in good faith. See 47 U.S.C. § 251(c)(1).
During these negotiations, any party may request the state
commission that regulates telephone services to mediate. See id.
§ 252(a)(2). In the event that the negotiations fail, the TCA
provides that either party may petition the state commission to
arbitrate any open issues. See id. § 252(b). An agreement
encompassing the access methods detailed in section 251(c),
whether arrived at privately or through compulsory arbitration,
must be approved by the state commission. See id. § 252(e)(1).
The TCA limits the grounds under which a commission may reject an
agreement under federal law and regulations see id. § 252(e)(2),
while preserving a state's authority to impose additional
conditions that do not conflict with federal law. See id.
§ 252(e)(3) (stating that, notwithstanding section 252(e)(2)
but subject to 47 U.S.C. § 253, "nothing in this section shall
prohibit a State commission from establishing or enforcing other
requirements of State law in its review of an agreement[.]").
If a state commission fails to act under section 252, the
Federal Communications Commission(FCC) will preempt the state
commission's jurisdiction and responsibilities over the access
agreements.*fn5 See id. § 252(e)(5); see generally Illinois
Bell, ___ F.3d at ___, 2000 WL 1010863, at *2-3 (detailing
section 252's procedural scheme); MCI Telecomm. Corp. v. Public
Serv. Comm'n, ___ F.3d ___, 2000 WL 783382, at *3 (10th Cir. June
20, 2000) (same).
"In any case in which a State commission makes a determination
under . . . [section 252], any party aggrieved by such
determination may bring an action in an appropriate Federal
district court to determine whether the agreement or
statement meets the requirements" of sections 251 and 252.
47 U.S.C. § 252(e)(6). Moreover, "[n]o State court shall have
jurisdiction to review the action of a State commission in
approving or rejecting an agreement" under section 252. Id.
B. The Parties' Challenges to the PUC's Global Order
At the heart of this action is an Opinion and Order entered by
the PUC on September 30, 1999 (Global Order). In the Global
Order, the PUC addressed the "several interrelated dockets
implementing state and federal telecommunications policy in the
Commonwealth of Pennsylvania." Global Order at 2 (Compl. Ex. 1).
The PUC undertook the proceedings that culminated in its Global
Order upon concluding that its previous system of separately
adjudicating individual telecommunications cases did not lead to
"satisfactory and prompt resolution" of the morass of issues
raised by federal and state law mandates to provide consumers
with competitive local telecommunications services. Id.
The PUC first attempted to settle the outstanding issues by
negotiation, but this method failed. Two competing petitions were
then filed before the Commission — one supported by Bell and
others who are not parties to this action, and the other
supported by Worldcom; AT & T; Senators Fumo, Madigan, and White;
and others who are not parties to this action. The Global Order
resolved the issues raised by the two petitions, as well as the
pending interrelated dockets that were consolidated for that
The action before this court alleges that several aspects of
the Global Order violate federal law.*fn6 Bell, Worldcom, and
AT & T all contend that rates for unbundled network elements
(UNE) set by the Global Order violate the TCA.*fn7 An order
entered by the PUC on August 7, 1997, first set permanent rates
for access to Bell's UNEs after a proceeding before the
Commission commonly referred to as MFS-Phase III. "[N]umerous,
subsequent agreements" incorporated the rates set by the
MFS-Phase III Order. Compl. ¶ 22. The Global Order rates
replace the MFS-Phase III rates.
Bell also challenges the PUC's authority under federal law to
require it to provide unbundled access to switching throughout
Pennsylvania and to provide unbundled access to digital
subscriber line access multiplexers (DSLAMs).*fn8 Bell contends
it should not be required, under federal law and regulations, to
make these network elements available because failure to provide
them would not impair a competitor's ability to provide services
and because they are not necessary for a competitor to provide
service. In addition, it contends that the PUC failed to engage
in the analysis required by the TCA in determining that Bell make
these elements available on an unbundled basis.
Finally, Bell challenges the discount wholesale rates for
retail services set by the Global Order. While the wholesale
discount rates set by a previous PUC decision are generally
unaffected, the Global Order increases for one year the discount
rate Bell may charge its competitors for retail services
in less populated areas of the Commonwealth as part of a
Bell brings its claims pursuant to the TCA, 42 U.S.C. § 1983,
and 22 U.S.C. § 2201(a), and seeks declaratory and injunctive
relief. AT & T and Worldcom bring their claims pursuant to the
TCA and seek declaratory and equitable relief.
Two other proceedings are relevant to this action. The first is
a challenge by Bell to the Global Order in state court. That
action includes the federal claims asserted here, as well as
state law claims regarding other aspects of the Global Order.
Numerous parties, including most of the intervenors in this
action, are participating in the state action. Bell contends that
it raised the federal claims in the state court solely as a
protective measure; in its petition for review before the
Commonwealth Court, it reserved the federal claims pursuant
to England v. Louisiana State Board of Medical Examiners,
375 U.S. 411 (1964).*fn9
The second proceeding was a case in the Middle District
of Pennsylvania, MCI Telecommunications Corp. v. Bell
Atlantic-Pennsylvania, Inc., No. 1:CV-97-1857. Worldcom
brought that action, pursuant to the TCA, to challenge an
interconnection agreement with Bell that had been approved by
the PUC. That agreement incorporated the UNE rates set by the
MFS-Phase III Order. See id., Report and Recommendation, at
3 (M.D. Pa. Aug. 10, 1998) (Worldcom's Brief in Opp. to Mot.
to Dismiss, Ex. 8).*fn10 The Middle District court held that
the PUC was not immune under the Eleventh Amendment see id., Order
(M.D. Pa. Nov. 5, 1998) (Worldcom's Brief in Opp. to Mot. to
Dismiss, Ex. 9), and, on June 30, 2000, it denied both the PUC's
motion to certify its decision on immunity for interlocutory
appeal,*fn11 see id., Mem. and Order (M.D. Pa. June 30, 2000)
(PUC's Reply Brief, Ex. 1), and decided the action on the merits,
see id., J. and Mem. (M.D. Pa. June 30, 2000) (Worldcom's Resp.
in Opp. to the Mot. for J. on the Pleadings, Ex. 1). On July 20,
2000, Bell filed a motion for relief from judgment pursuant to
Federal Rule of Civil Procedure 60 in light of a recently issued
decision by the Eighth Circuit that vacated portions of the FCC
regulations upon which the Middle District Court relied. See
Bell's Mot. for ...