CoreTel Virginia, LLC v. Verizon Virginia, LLC

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 13-1765

CORETEL VIRGINIA, LLC,

Plaintiff – Appellant,

v.

VERIZON VIRGINIA, LLC; VERIZON SOUTH, INC.; MCIMETRO ACCESS
TRANSMISSION SERVICES, LLC; MCI COMMUNICATIONS SERVICES,
INC.; VERIZON BUSINESS GLOBAL LLC; BELL ATLANTIC
COMMUNICATIONS, INC., d/b/a Verizon Long Distance,

Defendants – Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:12-cv-00741-CMH-TCB)

Argued: January 30, 2014 Decided: May 13, 2014

Before WILKINSON, NIEMEYER, and DUNCAN, Circuit Judges.

Affirmed in part, reversed in part, and remanded with
instructions by published opinion. Judge Duncan wrote the
opinion, in which Judge Wilkinson joined. Judge Niemeyer wrote
an opinion concurring in part and dissenting in part.

ARGUED: Edward Jay Tolchin, OFFIT KURMAN, P.C., Tysons Corner,
Virginia, for Appellant. Scott H. Angstreich, KELLOGG, HUBER,
HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for
Appellees. ON BRIEF: Andrew M. Hetherington, KELLOGG, HUBER,
HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for
Appellees.

2
DUNCAN, Circuit Judge:
Two telecommunications carriers, CoreTel Virginia, LLC and

Verizon Virginia, LLC, dispute their respective responsibilities

under their interconnection agreement (“ICA”), a contract which

governs how the carriers connect their networks and exchange

data. Each party contends that the other improperly billed it

for various services. The district court granted summary

judgment in Verizon’s favor on each claim. For the reasons that

follow, we vacate the district court’s decision with respect to

Verizon’s facilities claims, but affirm as to the others.

Ironically, in pursuit of its preferred result, the dissent

does exactly what it accuses the majority of doing. As we

explain in greater detail below, the dissent interprets the ICA

as the dissent imagines it should have been written, and not as

it was. With no textual support, and in contravention of the

cardinal rule that a contract must be interpreted as a whole,

giving effect to all its terms, the dissent elevates § 11 to an

isolated and independent status, renders superfluous the only

provision that specifically deals with interconnection, and

altogether ignores § 2.1, which explicitly provides that

headings are to have no substantive effect on the agreement’s

meaning.

3
 I.

The CoreTel/Verizon ICA 1 at issue here is a private contract

that implements duties imposed by the Telecommunications Act of

1996, Pub. L. 104–104, 110 Stat. 56, codified at 47 U.S.C. § 151

et seq. We therefore begin with a brief discussion of the

relevant provisions of the Telecommunications Act and the key

provisions of the parties’ ICA before turning to the procedural

history before us.

A.

The Telecommunications Act seeks to foster competition in

the telecommunications market by reducing the competitive

advantages enjoyed by the telecommunications carriers, known as

“incumbent carriers,” that enjoyed a monopoly in the market at

the time the statute was enacted. The Act requires incumbent

carriers to share their physical networks with new market

entrants, known as “competing carriers,” to mitigate the

prohibitive cost of building a new network. This appeal

implicates two of the duties imposed on incumbent carriers under

47 U.S.C. § 251.

First, § 251(c)(3) allows a competing carrier to lease

components of an incumbent carrier’s physical network for any

1
There are actually two Verizon/CoreTel ICAs. Because they
are identical in every term relevant here, we will treat them as
a single ICA.

4
purpose if an incumbent’s failure to provide these elements

would impair the competing carrier’s ability to provide

services. 47 U.S.C. §§ 251(c)(3), 251(d)(2)(B). An incumbent

carrier must provide these network elements at cost-based rates,

known as “TELRIC,” as opposed to higher tariff rates. 2 47 U.S.C.

§§ 251(c)(3), 252(d)(1); 47 C.F.R. § 51.505(b) (2010); see also

Implementation of the Local Competition Provisions in the

Telecommunications Act of 1996 [“Local Competition Order”], 11

F.C.C. 15499, ¶ 29 (1996). These network elements also must be

“unbundled,” meaning that they must be offered individually, and

not only as part of a broader package of services. 47 U.S.C. §

251(c)(3); Talk Am., Inc. v. Mich. Bell Tel. Co., 131 S. Ct.

2254, 2258 (2011); Local Competition Order, 11 F.C.C. 15499,

¶ 27.

Second, § 251(c)(2) promotes interconnection, the physical

link between two telecommunications networks that allows each

carrier’s customers to call the other’s. The FCC has

interpreted § 251(c)(2) to require, among other things, that an

incumbent carrier lease a competing carrier “entrance

2
Carriers generally may only charge rates under tariffs
filed with state and federal regulatory agencies but, in certain
cases the Telecommunications Act requires a carrier to charge an
even lower, TELRIC rate. See Verizon Commc'ns, Inc. v. FCC.,
535 U.S. 467, 478, 489 (2002); AT&T Commc'ns of Va., Inc. v.
Bell Atl.-Va., Inc., 197 F.3d 663, 674 (4th Cir. 1999).

5
facilities” required for interconnection at TELRIC. 3 See

Unbundled Access to Network Elements [“Remand Order”], 20 F.C.C.

2533, ¶ 140 (2005); Review of the Section 251 Unbundling

Obligations of Incumbent Local Exch. Carriers [“Triennial Review

Order”], 18 F.C.C. 16978, ¶ 366 (2003); see also Talk Am., 131

S. Ct. at 2261.

Until 2003, the FCC had also interpreted § 251(c)(3) to

require incumbent carriers to provide all entrance facilities at

TELRIC. However, the FCC reversed course in its Triennial

Review Order and Remand Order. It concluded that because

“entrance facilities are less costly to build, are more widely

available from alternative providers, and have greater revenue

potential,” an incumbent carrier’s failure to provide access to

these facilities would not impair the viability of competing

carriers. Remand Order, 20 F.C.C. 2533, ¶ 138, 141 (2005). 4 The

3
An “entrance facility” is the physical infrastructure,
such as wires or cables, typically used to connect one network
with another (“interconnection”) or to transport data to and
from equipment that a carrier has installed on another carrier’s
premises (“backhauling”). Talk Am., 131 S. Ct. at 2258–59.
Backhauling “occurs when a competitive [carrier] uses an
entrance facility to transport traffic from a leased portion of
an incumbent network to the competitor’s own facilities.
Backhauling does not involve the exchange of traffic between
incumbent and competitive networks.” Id. at 2259 n.2.
4
The FCC initially concluded, in the Triennial Review
Order, that entrance facilities are not covered by § 251(c)(3)
because they are not “network elements.” 18 F.C.C. 16978, ¶
366. Competitive carriers challenged this interpretation, and
(Continued)
6
FCC determined, therefore, that incumbent carriers need not

provide entrance facilities on an unbundled basis at TELRIC

rates under § 251(c)(3). Id. at ¶ 137.

Significantly, however, the FCC did not alter incumbent

carriers’ duties under § 251(c)(2), the provision that

specifically governs interconnection. Id. at ¶ 140. Therefore,

while an incumbent carrier no longer has a general obligation to

provide entrance facilities at TELRIC under § 251(c)(3), it

remains obligated to provide entrance facilities at TELRIC when

they are used for interconnection under § 251(c)(2). See Talk

Am., 131 S. Ct. at 2264-65; Remand Order, 20 F.C.C. 1533, ¶ 140;

Triennial Review Order, 18 F.C.C. 16978, ¶¶ 365, 366.

B.

With this regulatory framework in mind, we now turn to the

ICA between Verizon, an incumbent carrier, and CoreTel, a

competing carrier. A close examination of the ICA is necessary

because the § 251 duties discussed above are not directly

enforceable. See 47 U.S.C. §§ 251(c)(1), 252(a)(1). Instead,

these duties only apply if they are incorporated into an ICA.

See Core Commc’ns, Inc. v. SBC Commc’ns Inc., 18 F.C.C. 7568, ¶

the United States Court of Appeals for the District of Columbia
Circuit remanded the matter to the FCC, observing that “the
Commission's reasoning appears to have little or no footing in
the statutory definition.” U.S. Telecom Ass'n v. FCC, 359 F.3d
554, 586 (D.C. Cir. 2004). In response, the FCC promulgated the
Remand Order. 20 F.C.C. 2533, ¶ 4.

7
32 (2003), vacated on other grounds by SBC Commc’ns Inc. v. FCC,

407 F.3d 1223 (D.C. Cir. 2005).

The interplay between the ICA and the relevant statutory

provisions is further complicated by the fact that the

Verizon/CoreTel ICA is an adoption of an existing ICA under 47

U.S.C. § 252(i). Because the original ICA took effect before

the FCC reinterpreted § 251(c)(3) in its Triennial Review Order

and Remand Order, the adoption agreement that accompanies the

CoreTel/Verizon ICA contains a provision meant to clarify

Verizon’s duties in light of the changed regulatory backdrop.

See ICA Adoption Agreement § 1.B, J.A. 366. Section 1.B of the

adoption agreement provides that, “adoption of the [ICA] does

not include adoption of any provision imposing an unbundling

obligation on Verizon that no longer applies to Verizon under

[the Triennial Review Order and Remand Order].” J.A. 366.

To aid in our analysis, we will discuss four provisions of

the ICA. Section 4 addresses interconnection, § 11 addresses

the leasing of network elements, § 5.7 sets out a compensation

regime for local cross-network calls, and Exhibit A lists the

rates that apply to the agreement. We now address each briefly

in turn.

ICA § 4, “Interconnection and Physical Architecture,”

addresses the physical interconnection of the parties’ two

networks. J.A. 216. This section provides that CoreTel may

8
specify one of three physical methods to connect with Verizon at

an agreed-upon interconnection point. ICA § 4.3.1, J.A. 218.

One of the methods allows CoreTel to lease an entrance facility

from Verizon. 5 Id. CoreTel may request any of the listed

interconnection methods at the “rates and charges, set forth in

this Agreement, in any applicable Tariff(s), or as may be

subsequently agreed to between the parties.” ICA § 4.3.3, J.A.

218. The ICA provides Verizon analogous rights to interconnect

with CoreTel. ICA § 4.3.4, J.A. 218.

ICA § 11, “Unbundled Access,” enumerates the network

elements, including entrance facilities, that Verizon will

provide to CoreTel on an unbundled basis. J.A. 240–66. This

section primarily consists of a detailed list of network

elements, expressed in highly technical terms, and the

parameters under which they may be ordered. 6 Id.

ICA § 5.7, “Reciprocal Compensation and other Intercarrier

Compensation Arrangements,” provides a distinct billing regime

5
The other options allow CoreTel to interconnect through
“collocation”--that is, by installing its equipment inside of
Verizon’s facility. ICA § 4.3.1, J.A. 218. One option allows
CoreTel to use its own collocated equipment, and the other
allows CoreTel to use a third-party’s collocated equipment. Id.
6
ICA § 11 does not, for example, contain a listing for
“entrance facilities.” Instead, it lists the various, specific
types of physical wires and cables that Verizon is to make
available, such as “2-Wire HDSL Compatible Loop” or “4-Wire DS1-
compatible Loop.” ICA §§ 11.3.5, 11.3.7, J.A. 243.

9
for local calls originating within Verizon’s network and

terminating within CoreTel’s network (i.e., local calls from

Verizon customers to CoreTel customers), and vice versa. J.A.

222. These calls are billed per minute of usage as “reciprocal

compensation” by the recipient carrier. See ICA §§ 1.60, 1.60a,

5.7.1, J.A. 212, 222–23; ICA Exhibit A §§ A.I, B.I, J.A. 322,

353.

Finally, ICA Exhibit A lists TELRIC rates for various

network elements and includes rates for leasing entrance

facilities under the heading “Unbundled Transport.” ICA Exhibit

A § A.II.C, J.A. 324. It also includes rates for reciprocal

compensation. ICA Exhibit A §§ A.I, B.I, J.A. 322, 353.

C.

Soon after the parties agreed to their ICA, a dispute arose

regarding the rates CoreTel is required to pay for

interconnection entrance facilities. Verizon insisted that

CoreTel pay tariff rates and CoreTel refused. This dispute

continued until 2012 when Verizon finally threatened to

terminate CoreTel’s service. CoreTel brought suit seeking to

enjoin Verizon’s threatened service termination. Verizon filed

various counterclaims, and CoreTel amended its complaint to add

still more claims. The district court ultimately divided these

claims and counterclaims into four broad categories: (1)

Verizon’s facilities claims relating to its bills to CoreTel for

10
the entrance facilities CoreTel leased; (2) CoreTel’s facilities

claims relating to its bills to Verizon for the entrance

facilities that CoreTel contends Verizon leased; (3) Verizon’s

reciprocal compensation claims; and (4) Verizon’s claims that

CoreTel improperly billed it for services under CoreTel’s

tariffs.

The district court granted summary judgment in Verizon’s

favor on each issue, but on liability only. It reserved the

question of damages for trial. The parties then jointly moved

for a final judgment reflecting “the stipulated damages that are

required by [the district court’s summary judgment] ruling” to

expedite an appeal. Joint Motion, J.A. 1500. The district

court entered the agreed-to final judgment, and this appeal

followed.

II.

Each of the issues discussed below was resolved on motions

for summary judgment. Accordingly, we review each under the

same familiar standard:

We review the district court’s order granting summary
judgment de novo, viewing the facts in the light most
favorable to, and drawing all reasonable inferences in
favor of, the nonmoving party. Summary judgment is
appropriate when there are no genuine issues of
material fact and the moving party is entitled to
judgment as a matter of law.

11
Garofolo v. Donald B. Heslep Assocs., Inc., 405 F.3d 194, 198-99

(4th Cir. 2005) (internal citations omitted).

While we must draw all reasonable inferences in the light

most favorable to the nonmoving party, it is ultimately the

nonmovant’s burden to persuade us that there is indeed a dispute

of material fact. Thompson v. Potomac Elec. Power Co., 312 F.3d

645, 649 (4th Cir. 2002). It must provide more than a scintilla

of evidence--and not merely conclusory allegations or

speculation--upon which a jury could properly find in its favor.

Id.

Like any other contract, “[w]e interpret [an ICA] as

written and, when its terms are clear and unambiguous, we

construe the contract according to its plain meaning.” Cent.

Tel. Co. of Va. v. Sprint Commc'ns Co. of Va., Inc., 715 F.3d

501, 517 (4th Cir. 2013) (internal quotation marks and citation

omitted). Because an ICA is a private agreement on the one

hand, and an instrument of federal regulation on the other, we

are guided in our interpretation by both contract law and

relevant federal precedent. Id. at 517 n.20. When “[t]he

contractual duty at issue . . . is a duty imposed by the Act

itself . . . the resolution of a claim regarding the scope of

that statutory duty . . . depends on the interpretation and

application of federal law.” Core Commc'ns, Inc. v. Verizon Md.

LLC, ___ F.3d ____, 2014 WL 868618 (4th Cir. Mar. 6, 2014).

12
 III.

On appeal, CoreTel challenges the district court’s grant of

summary judgment in Verizon’s favor on all claims. For clarity,

we adopt the district court’s categorization of the claims, and

address each category in turn.

A.

We first address Verizon’s claims relating to the

applicable rates for entrance facilities. Verizon contends that

§ 1.B of the Adoption Agreement eliminated its obligation under

the ICA to provide entrance facilities at TELRIC for any

purpose. As a result, Verizon has billed CoreTel for its

interconnection entrance facilities at tariff rates since the

adoption of the ICA. CoreTel has refused to pay those rates,

maintaining that the ICA permits it to pay the lower TELRIC

rates.

We agree with the dissent that this is, ultimately, a

contract dispute and, as with any contract, we interpret the ICA

according to its terms. But the dissent ignores both the

"cardinal principle of contract construction . . . that a

document should be read to give effect to all its provisions,"

Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63

(1995), and the fundamental rule that, when the written terms of

an agreement are clear, evidence of the parties' intent "is

13
utterly inadmissible." Moran v. Prather, 90 U.S. 492, 501

(1874).

As discussed above, ICA § 4.3 is the only provision of the

ICA that deals specifically with interconnection. Within that

section, § 4.3.1 authorizes CoreTel to order “an Entrance

Facility . . . leased from Verizon” for interconnection. J.A.

218. ICA § 4.3.3 then provides that CoreTel may order this

entrance facility at the “rates and charges, set forth in this

Agreement, in any applicable Tariff(s), or as may be

subsequently agreed to between the parties.” Id. Exhibit A of

the ICA lists, in turn, the schedule of rates for various

network elements and services, including TELRIC rates for

entrance facilities. ICA Exhibit A § A.II.C, J.A. 324. Though

Verizon contends otherwise, the most natural reading of these

provisions is that the TELRIC rates listed at Exhibit A §

A.II.C. are the “rates and charges, set forth in this Agreement”

referred to in ICA § 4.3.3.

Verizon advances an alternative interpretation of the ICA.

ICA § 4.3, it contends, does not give rise to any independent

obligation to make entrance facilities available at TELRIC but,

instead, simply indicates that entrance facilities may be leased

under § 11 for interconnection. In Verizon’s view, § 1.B of the

adoption agreement eliminates its obligation under § 11 to

provide entrance facilities at TELRIC for any purpose. It

14
contends that entrance facilities are therefore unavailable at

those rates under § 4.3.

Simply put, no provision of the ICA indicates that § 4.3

relies upon § 11 in the way Verizon suggests. As explained

above, ICA § 4.3 imposes an obligation on Verizon, independent

of § 11, to offer entrance facilities at the TELRIC rates listed

in Exhibit A. 7 Therefore we need not consider the impact of

§ 1.B of the Adoption Agreement on the services available under

§ 11. Section 1.B of the Adoption Agreement does not affect our

analysis of ICA § 4.3 because Verizon’s duties under ICA § 4.3

arise under the specific interconnection provisions of 47 U.S.C.

§ 251(c)(2). These duties were unaltered by the Triennial

Review Order and the Remand Order, the FCC orders incorporated

by the Adoption Agreement.

We further note that our conclusion in no way renders the

entrance facility provisions of ICA § 11 superfluous. ICA § 11

permitted CoreTel to purchase entrance facilities for purposes

not addressed by ICA § 4.3, such as backhauling. See Talk Am.,

131 S. Ct. at 2259.

7
Verizon suggests that, because rates for entrance
facilities are listed in Exhibit A only under the heading
“Unbundled Transport,” they are available only to entrance
facilities ordered under § 11, “Unbundled Access.” J.A. 240,
322. The ICA, however, specifically provides that headings “are
not intended to be a part of or to affect the meaning” of the
agreement. ICA § 2.1, J.A. 214-15.

15
 Verizon’s and the dissent’s arguments based on the ICA

drafters’ intent are similarly unavailing. Verizon argues, and

the dissent accepts, that the drafters of the ICA would never

have suspected that 47 U.S.C. § 251(c)(2) imposed a duty,

independent of § 251(c)(3), to provide entrance facilities for

interconnection at TELRIC because the FCC first explicitly

articulated that obligation after the ICA was drafted, in the

Triennial Review Order. Thus, Verizon argues, there is no

reason to think the drafters intended to write such an

obligation into the ICA.

This contention fails for at least two fundamental reasons.

First, like any contract, an ICA is interpreted according to its

written terms. Cent. Tel. Co. of Va., 715 F.3d at 517. If a

contract’s language is clear, we may not choose to supplement it

with evidence of the drafters’ intent. See Moran, 90 U.S. at

501. As explained above, we find the language of the ICA

sufficiently clear to establish that Verizon must offer entrance

facilities at TELRIC for interconnection, without resort to the

intent of its drafters.

Second, we find Verizon’s speculation about the drafters’

subjective views unpersuasive. Contrary to Verizon’s and the

dissent’s contentions, there are indications that the drafters

of the ICA regarded § 251(c)(2) as imposing an independent duty

to provide entrance facilities for interconnection at cost-based

16
rates. The most obvious indication is the very existence of §

4.3. This section would have been curiously redundant if §

251(c)(3) and ICA § 11 already required that entrance facilities

be provided at cost-based rates for interconnection but §

251(c)(2) did not. Moreover, this obligation flows clearly from

the text of the Telecommunications Act itself and longstanding

FCC regulations. Section 251(c)(2) requires incumbent carriers

to provide interconnection at “any technically feasible point

within the carrier’s network,” and the FCC had long interpreted

“the carrier’s network” to include its entrance facilities. See

Talk Am., 131 S. Ct. at 2261; Local Competition Order, 11 F.C.C.

15499, ¶ 26. Therefore, “[s]ince the enactment of the 1996 Act,

the FCC has consistently construed [47 U.S.C. 251(c)(2)] to mean

that an incumbent may be required to provide facilities to a

competitor in order to link the two carriers’ networks.” Brief

for the United States as Amicus Curiae Supporting Petitioners at

22, Talk Am., Inc. v. Mich. Bell Tel. Co., 131 S.Ct. 2254 (2011)

(Nos. 10-313, 10-329).

We therefore conclude that the CoreTel/Verizon ICA entitles

CoreTel to order entrance facilities for interconnection at

TELRIC. 8 Accordingly, CoreTel was entitled to summary judgment

8
We are perplexed by the comfort taken by the dissent in
distinguishing entrance facilities as such from interconnection
(Continued)
17
in its favor on both its and Verizon’s claims for declaratory

relief relating to Verizon’s facilities charges. We remand to

the district court for consideration of CoreTel’s claim for

injunctive relief and Verizon’s damages claim in light of this

conclusion.

B.

We next turn to CoreTel’s facilities claims. After CoreTel

initiated this case, CoreTel submitted 42 new bills--totaling

more than $1.7 million--to Verizon for facilities charges

beginning in 2009. These charges, CoreTel contends, are for

trunk ports and multiplexers 9 used to handle calls delivered by

Verizon to CoreTel. CoreTel concedes that Verizon provided its

own means of reaching CoreTel’s switch. But it contends that

the ports and multiplexers that it provided on its side of the

interconnection point qualify as entrance facilities and,

as a “service,” as though the ICA did not specifically link the
two by allowing CoreTel to interconnect via entrance facilities.
9
A trunk port is a physical port in a switch. See, e.g.,
Access Charge Reform for Incumbent Local Exch. Carriers Subject
to Rate-of-Return Regulation, 13 F.C.C. 14238, ¶ 49 (1998). A
switch is “[t]he critical piece of telephone network equipment
that . . . connect[s] a call from any customer’s line to any
other customer’s line.” Stuart M. Benjamin et al.,
Telecommunications law and Policy 952 (3d ed. 2012).
Multiplexers encode multiple calls so that they may be
transmitted on the same wire (and the reverse: extracting a
single call from the encoded stream of multiple multiplexed
calls). See, e.g., Worldcom, 17 F.C.C. 27039, ¶ 228 (2002).

18
accordingly, may be billed to Verizon under ICA §§ 1.25 and

4.3.5. 10

We agree with Verizon that the multiplexing and trunk ports

at issue are not entrance facilities under the ICA. ICA § 4.3.5

therefore provides no basis for CoreTel’s facilities charges.

As it is defined in the ICA, an “entrance facility” is a

facility connecting and, crucially, lying “between” the

interconnecting carrier’s premises and the other party’s central

office. ICA § 1.25, J.A. 208. But the trunk ports and

multiplexers CoreTel provided lay within CoreTel’s central

office, not “between” CoreTel’s central office and Verizon’s

premises. Thus, Verizon’s facilities, not CoreTel’s, spanned

the distance between Verizon’s premises and CoreTel’s central

office. Accordingly, the facilities CoreTel provided were not

entrance facilities under ICA § 1.25. 11

CoreTel also contends that it was entitled to bill Verizon

for its use of these facilities because they were “necessary” to

10
CoreTel supports its claim with documents that, it
contends, reflect orders from Verizon for these facilities. As
we explain below, CoreTel was not entitled to bill Verizon for
these facilities regardless of whether Verizon submitted orders
for them.
11
There is no merit to CoreTel’s related contention that
Verizon breached the ICA by failing to order an entrance
facility. The ICA does not require Verizon to order an entrance
facility for interconnection but merely provides that it has the
“sole right and discretion” to do so. ICA § 4.3.4, J.A. 208.

19
the use of Verizon’s self-provisioned facilities. But CoreTel

points to no provision of the ICA that authorizes CoreTel to

simply levy facilities charges for any piece of equipment that

handles Verizon’s traffic. Instead, the ICA provides that

CoreTel is to be compensated for the use of these facilities, on

its side of the interconnection point, exclusively under the

rubric of reciprocal compensation.

We therefore affirm the district court’s grant of summary

judgment on CoreTel’s facilities claims.

C.

We next address Verizon’s reciprocal compensation claims.

As discussed above, when a local call is generated on one

party’s network and terminates on the other network, the party

on whose network the call terminates may bill the originating

party for reciprocal compensation. See ICA §§ 1.60, 1.60a,

5.7.1, J.A. 212, 222–23. However, the ICA exempts two

categories of traffic from this scheme: “third-party traffic”

and “interLATA traffic.” 12 See ICA § 5.7.2(a)-(c), J.A. 223.

12
“Third-party traffic” is traffic originated by a third
carrier, not a party to the ICA, and merely delivered to the
terminating party by way of the other party’s network. See ICA
§ 5.2.1(a)-(b), J.A. 223. Thus, if there were a third carrier,
Carrier X that also interconnected with Verizon’s network,
Carrier X’s customers might be able to call CoreTel’s customers
by way of Verizon’s network. Such calls would constitute third-
party traffic with respect to Verizon and CoreTel. “InterLATA
traffic” is traffic generated outside the local calling area,
(Continued)
20
 Verizon claims that CoreTel violated these provisions by

charging it reciprocal compensation for third-party and

interLATA calls. CoreTel does not contest this allegation.

Instead, CoreTel argues that Verizon should have to pay

reciprocal compensation charges for a call when it does not

provide “EMI data” for it, data CoreTel claims is needed to

properly categorize every call.

However, neither the ICA nor the FCC order on which CoreTel

seeks to rely, Cavalier Telephone LLC, 18 F.C.C. 25887 (2003),

support this conclusion. Simply put, there is no provision of

the ICA that requires Verizon to provide EMI data for every call

delivered over the trunk at issue. In addition, Cavalier

Telephone is not controlling. Cavalier Telephone was an

arbitration order under 47 U.S.C. § 252(e)(5) relating to a

separate interconnection agreement between Verizon and Cavalier

Telephone. It required only that a provision be inserted into

that particular ICA regarding Verizon’s duty to provide EMI data

to Cavalier Telephone, not that all carriers provide EMI data

independent of the terms of their ICAs. See Id. ¶ 40. Adopting

CoreTel’s argument would frustrate the regulatory approach

articulated by the FCC in its Core Commc'ns order by allowing

commonly known as “long distance calls.” See SBC Commc'ns Inc.
v. FCC, 138 F.3d 410, 412 n.1 (D.C. Cir. 1998).

21
carriers to enforce § 251 duties not embodied in their own ICAs.

See Core Commc'ns, Inc., 18 F.C.C. 7568, ¶ 32. 13

We therefore affirm the district court’s grant of summary

judgment in Verizon’s favor on CoreTel’s reciprocal compensation

claims.

D.

We now address Verizon’s claims that CoreTel improperly

billed it for services under its tariffs. Verizon contends that

it is entitled to recoup, under the filed-rate doctrine, amounts

that it paid to CoreTel for “end-office switched access” because

the description of that service in CoreTel’s tariff was

inaccurate. 14 The filed-rate doctrine requires that, to charge

for services under a tariff, a carrier must provide its services

in exactly the way the carrier describes them in that tariff.

Bryan v. BellSouth Commc'ns, Inc., 377 F.3d 424, 429 (4th Cir.

2004); Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d

1166, 1170 (9th Cir. 2002). 15

13
We conclude that CoreTel’s remaining arguments relate
only to damages and are foreclosed by the parties’ stipulated
judgment. See J.A. 1518–19.
14
Neither party makes clear which switched-access rate
category CoreTel applied in levying the contested charges. See
FCC Tariff No. 3, § 3.3, J.A. 474; Va. SCC Tariff No. 3,
§ 3.3, J.A. 555. The parties appear to agree, however, that
“end-office switching” is the relevant category. See Br. at 54,
Op. Br. at 52-53.
15
The parties provide no authority to establish that
Virginia applies the filed-rate doctrine to its state tariffs.
(Continued)
22
 CoreTel’s state and federal tariffs provide that CoreTel’s

end-office switching service will include “terminations in the

end office of end user lines.” FCC Tariff No. 3, § 3.3.2, J.A.

474; Va. SCC Tariff No. 3, § 3.3.1(C), J.A. 555. The FCC has

held that this tariff language carries a specific and

established meaning: “a physical transmission facility that

provides a point-to-point connection between a customer premises

and a telephone company office.” AT&T Corp. v. YMax Comm. Corp.

[“YMax”], 26 F.C.C. 5742, ¶ 40 (2011). To provide “terminations

in the end office of end user lines,” a carrier must “provide .

. . physical transmission facilities that establish point-to-

point connections between the premises of Called/Calling Parties

and [the carrier’s] equipment.” YMax, 26 F.C.C. 5742, ¶ 37,

41.

The undisputed evidence establishes that CoreTel does not

provide the physical infrastructure over which calls are

delivered from CoreTel’s premises to its customers. Instead, as

in YMax, CoreTel converts incoming calls into a data stream once

they reach its office and then delivers these calls to its

customers over the public internet. See YMax, 26 F.C.C. 5742, ¶

41; J.A. 390(K), (Q)-(R), (T)-(W). This evidence makes clear

CoreTel, however, does not contend otherwise. We therefore
conclude that CoreTel has waived this argument and proceed with
our analysis assuming, without deciding, that Virginia does
indeed follow the filed-rate doctrine.

23
that CoreTel has not deployed its own physical facilities to

connect it to its customers and, accordingly, does not provide

“terminations in the end office of end user lines” as required

by its tariffs.

It is no mere technicality that the language of CoreTel’s

tariff requires that CoreTel itself provide the facilities.

End-office switching charges are among the highest recurring

charges in any carrier’s tariff, a price that is ordinarily

justified by the need “to allow local exchange carriers to

recover the substantial investment required to construct the

tangible connections between themselves and their customers

throughout their service territory.” YMax, 26 F.C.C., 5742, ¶

40. A carrier that finds a way to deliver incoming calls to its

customers without building physical connections to each of them

has far less infrastructure investment to recoup.

CoreTel argues in the alternative that its tariffs, unlike

those in YMax, explicitly permit it to charge for “switched-

access service” provided using IP technology. See FCC Tariff

No. 3, § 1, J.A. 433. But this language only appears in

CoreTel’s general definition of switched-access service. Id.

The language interpreted in Ymax, discussed above, appears in

CoreTel’s more specific definition of the particular type of

switched access service at issue, end-office switched access.

Id. at § 3.3.2, J.A. 474. The specific governs the general.

24
See RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct.

2065, 2071 (2012). The language of CoreTel’s end-office

switching service does not permit that specific tariff rate to

be applied when CoreTel delivers calls to customers over the

public Internet rather than using a physical facility owed by

CoreTel. 16

We therefore affirm the district court’s grant of summary

judgment in Verizon’s favor on Verizon’s switched-access claims.

IV.

For the reasons above, the judgment of the district court

is

AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED WITH INSTRUCTIONS.

16
Contrary to CoreTel‘s contention, a subsequent FCC
regulation that incorporates this sort of IP-based termination
into a definition of “switched exchange access services” does
not alter our interpretation of CoreTel’s tariff. See 47 C.F.R.
§ 61.26(a)(3)(ii) (2012). This regulation merely defines the
term for the purposes of determining what tariffs will be
subject to regulation as switched-access tariffs. It does not
mandate a definition of “switched access” as the term is used in
a switched-access tariffs, much less one that vitiates the
descriptions of narrower switched-access rate categories.

25
NIEMEYER, Circuit Judge, concurring in part and dissenting in
part:

This is a straightforward contract dispute between two

telecommunications companies, CoreTel and Verizon, over the fees

each agreed to pay the other in interconnecting their networks.

When Verizon pressed CoreTel to pay over $880,000 in past-due

amounts for “entrance facilities” that CoreTel leased from

Verizon, CoreTel commenced this action.

While each party has disputed various amounts payable to

the other, the principal dispute, on which I disagree with the

majority, is whether CoreTel agreed to pay Verizon a tariff rate

or a lower cost-based rate for lease of Verizon’s entrance

facilities for the purpose of interconnection. Reading the

contract as a whole and in context, I conclude that it clearly

required CoreTel to pay tariff rates, as the district court also

concluded.

I respectfully submit that the majority has rewritten this

private agreement to bring it in line with what CoreTel might

have been able to obtain through negotiations when it signed the

contract, based on changing interpretations of the

Telecommunications Act of 1996, which regulates such agreements.

That is, it focuses on what CoreTel could have demanded under

the law, not on what CoreTel actually agreed to accept when it

executed the written contract. No one contends that the written

26
contract was or is unenforceable or not in compliance with the

Telecommunications Act. Indeed, the Telecommunications Act

itself allows the parties to negotiate the rates and fees to be

paid for connecting networks. See 47 U.S.C. § 252.

Thus, I would enforce the contract according to its terms

and affirm the judgment of the district court.

I.

Verizon (referring collectively to Verizon Virginia LLC and

Verizon South Inc.) is an incumbent local exchange carrier

(“incumbent LEC”) that has been providing telephone exchange

services throughout Virginia since before the enactment of the

Telecommunications Act of 1996. In enacting that Act, Congress

sought to introduce competition in the telecommunications market

by lowering the barriers to entry for would-be competitors. To

this end, the Act requires incumbent LECs to share their

networks with any competitive local exchange carrier

(“competitive LEC”) and allow the competitive LEC (1) to lease

from the incumbent LEC unbundled network elements (i.e., “a la

carte” network elements enabling the competitive LEC “to create

its own network without having to build every element from

scratch,” Talk Am., Inc. v. Mich. Bell Tel. Co., 131 S. Ct.

2254, 2258 (2011)) and (2) to interconnect with the incumbent

LEC’s network.

27
 These obligations are codified in two statutory provisions.

Section 251(c)(3) of the 1996 Act requires incumbent LECs to

provide competitive LECs with “nondiscriminatory access to

network elements on an unbundled basis.” 47 U.S.C. § 251(c)(3)

(emphasis added). And, in a similar vein, § 251(c)(2) requires

an incumbent LEC “to provide, for the facilities and equipment

of any requesting telecommunications carrier, interconnection

with the local exchange carrier’s network . . . for the

transmission and routing of telephone exchange service and

exchange access.” Id. § 251(c)(2) (emphasis added). For such

unbundled network elements and interconnection, the incumbent

LEC may only charge “rates, terms, and conditions that are just,

reasonable, and nondiscriminatory.” Id. §§ 251(c)(2)(D),

251(c)(3). But the Telecommunications Act makes clear that

those rates, terms, and conditions are subject to negotiation by

the parties. See id. § 252(a).

CoreTel Virginia, LLC, is a competitive LEC that, like

Verizon, serves customers in Virginia. When it requested

unbundled network elements and interconnection from Verizon, the

parties entered into an agreement on November 16, 2004 (“2004

Adoption Agreement”), which adopted the terms and conditions of

an earlier, 2002 arbitrated interconnection agreement between

Verizon and Cox Virginia Telcom, Inc. (“2002 Interconnection

Agreement”). The 2004 Adoption Agreement incorporated all the

28
terms and conditions of the 2002 Interconnection Agreement with

several modifications, including a modification that the 2004

Adoption Agreement “[did] not include adoption of any provision

[in the 2002 Interconnection Agreement] imposing an unbundling

obligation on Verizon” because, as the 2004 Adoption Agreement

explained, that obligation no longer applied to Verizon as a

result of a 2003 FCC order, In re Review of Section 251

Unbundling Obligations of Incumbent Local Exch. Carriers (“2003

Triennial Order”), 18 FCC Rcd. 16978 (2003), and subsequent

related decisions.

With respect to the “entrance facilities” that are at issue

in this case, the 2002 Interconnection Agreement authorized

CoreTel to interconnect through, among other options, “an

Entrance Facility . . . leased from Verizon . . . in accordance

with . . . terms and conditions, including without limitation,

rates and charges set forth [1] in this Agreement, [2] in any

applicable Tariff(s), or [3] as may be subsequently agreed to

between the Parties.” 2002 Interconnection Agreement, §§ 4.3.1,

4.3.3. The “rates and charges set forth in this Agreement” were

those described in Exhibit A, entitled “Detailed Schedule of

Itemized Charges.” Exhibit A included a category of rates

called “Unbundled Transport,” under which it specified rates for

“Entrance Facilities,” as are at issue here. And the terms for

unbundled transport were set forth in § 11 of the Agreement.

29
The parties agree that Exhibit A’s rates and charges were cost-

based. Under the terms of the 2004 Adoption Agreement, however,

Verizon’s unbundling obligations were eliminated, leading

Verizon to bill CoreTel for entrance facilities not as unbundled

elements under the cost-based rate in Exhibit A, but as entrance

facilities under Verizon’s tariff rates.

Although Verizon thus billed CoreTel each month over the

course of some eight years for entrance facilities at tariff

rates, CoreTel maintained that it should only have been charged

cost-based rates and refused even to pay those rates, making

only a single payment of $591.95 in February 2006. By the time

of this litigation, it had run up a bill of over $880,000, based

on Verizon’s billings at tariff rates.

When Verizon sent CoreTel notice of default and threatened

to terminate service, CoreTel commenced this action. While the

parties have fought over various amounts owed, the main issue

presented to us on appeal is whether the 2002 Interconnection

Agreement, as modified by the 2004 Adoption Agreement, entitled

CoreTel to pay only cost-based rates for entrance facilities for

the purpose of interconnection instead of the tariff rates that

Verizon billed.

The district court concluded that the 2002 Interconnection

Agreement did not give CoreTel a right to lease entrance

facilities for interconnection at cost-based rates, even though

30
CoreTel could have insisted on such rates when the 2004 Adoption

Agreement was executed. Despite this legal right, the district

court noted that CoreTel was bound by the terms of the contract

to which it actually agreed. The court thus entered judgment in

favor of Verizon.

II.

Based on the contract as written, I agree with the district

court and conclude that CoreTel was required to pay tariff rates

for entrance facilities, as Verizon billed it.

The structure of the obligations between the parties is

readily apparent from the agreement taken as a whole. Section

4.3.1 of the 2002 Interconnection Agreement authorized CoreTel

to specify any of three different methods by which to connect

with Verizon’s network, including through “an Entrance

Facility.” And § 4.3.3 provided that the rates and charges for

such facilities were as (1) “set forth in this Agreement,” (2)

“set forth . . . in any applicable Tariff(s),” or (3) “as may be

subsequently agreed to between the Parties.” But critically, §

4.3.3 did not directly refer to any rates. In fact, the only

rates for entrance facilities actually “set forth in the

Agreement,” were referenced in § 11, which governed only

unbundled access. Section 11 addressed “interoffice

transmission facilities” and provided that “Verizon shall

31
provide [CoreTel] with dedicated local transport, common local

transport in conjunction with unbundled local switching,

unbundled interoffice transmission facilities, and other

services in accordance with Exhibit A.” 2002 Interconnection

Agreement, § 11.6 (emphasis added). And part II of Exhibit A

listed cost-based rates for unbundled elements, including a

cost-based rate for “Entrance Facilities.” Id. Exhibit A, part

II.C. No other part of Exhibit A mentioned entrance facilities;

they were listed only under “Unbundled Transport.”

In short, the 2002 Interconnection Agreement provided that

entrance facilities were to be billed either at tariff rates or,

if leased as unbundled elements, at cost-based rates as set

forth in Exhibit A. Those rates were the only “rates and

charges” “set forth” in the 2002 Interconnection Agreement.

Thus, under the 2002 Agreement, if charges for entrance

facilities were not payable in accordance with Exhibit A, they

were only payable at tariff rates.

The 2002 Interconnection Agreement’s provisions allowing

for purchase of unbundled network elements at cost-based rates

were, at the time (in 2002), necessitated by 47 U.S.C. §

251(c)(3), which required Verizon, as an incumbent LEC, to

provide any requesting competitive LEC, such as CoreTel,

unbundled network elements at a reasonable, nondiscriminatory

rate. And that rate was established by the FCC, in interpreting

32
§ 251(c)(3), to be its cost-based TELRIC rate (standing for

Total Element Long-Run Incremental Costs) -- a rate “based on

the hypothetical construction and operation of the most

efficient local network conceivable.” GTE South, Inc. v.

Morrison, 199 F.3d 733, 747 (4th Cir. 1999).

After the 2002 Interconnection Agreement was executed,

however, the law regarding § 251(c)(3)’s unbundling requirements

changed. The FCC, in its 2003 Triennial Order, interpreted §

251(c)(3) not to require incumbents to provide competitive LECs

with entrance facilities as unbundled network elements at cost-

based rates. Instead, the FCC concluded that entrance

facilities must be provided at cost-based rates only for the

limited purpose of interconnection:

We conclude that our previous definition [of §
251(c)(3)] was overly broad. As we explain in this
Part, competitive LECs often use transmission links
including unbundled transport connecting incumbent
LEC switches or wire centers in order to carry traffic
to and from its end users. . . . Unlike the
facilities that incumbent LECs explicitly must make
available for section 251(c)(2) interconnection, we
find that the Act does not require incumbent LECs to
unbundle transmission facilities connecting incumbent
LEC networks to competitive LEC networks for the
purpose of backhauling traffic.

In reaching this determination we note that, to the
extent that requesting carriers need facilities in
order to interconnect with the [incumbent LEC’s]
network, section 251(c)(2) of the Act expressly
provides for this and we do not alter the Commission’s
interpretation of this obligation.

33
2003 Triennial Order, 18 FCC Rcd. ¶ 365, at 17203-04

(alterations in original) (emphasis added) (footnotes omitted)

(internal quotation marks omitted). The Supreme Court has since

embraced that Order, stating that entrance facilities must be

leased at cost-based rates for the purpose of interconnection

only. See Talk America, 131 S. Ct. at 2258-60.

The parties were aware of these developments when they

contracted in 2004. Accordingly, they included a provision

eliminating any unbundling obligation in their 2004 Adoption

Agreement:

For avoidance of doubt, adoption of the Terms does not
include adoption of any provision imposing an
unbundling obligation on Verizon that no longer
applies to Verizon under the [2003 Triennial Order and
related case law].

2004 Adoption Agreement, § 1.B. It is incontrovertible that, by

reason of that language, CoreTel was not entitled to lease

entrance facilities as unbundled network elements pursuant to §

251(c)(3). Indeed, CoreTel notes in its briefing that it “never

ordered [an unbundled network element], period.” And with the

elimination of the unbundling obligation, the rates for

unbundled elements were rendered inapplicable, including the

rate for “Entrance Facilities.”

But CoreTel contends that the 2002 Interconnection

Agreement nonetheless required that Verizon provide entrance

facilities under § 251(c)(2) at the cost-based rates in Exhibit

34
A. It argues, and the majority accepts, that § 4.3.3 of the

2002 Interconnection Agreement explicitly provided for

“interconnection” at the rates “set forth in this Agreement” and

that those rates were the cost-based rates provided in Exhibit

A, even though the rates in Exhibit A were specifically for

unbundled elements. Under CoreTel’s view, § 4.3.3 did not

specify whether Verizon had to provide interconnection via

leases of entrance facilities as unbundled elements under §

251(c)(3) (its right to which was abrogated under the 2004

Adoption Agreement) or for purposes of interconnection only, as

under § 251(c)(2). Thus, it argues, its rights to purchase

entrance facilities for interconnection were not affected by the

2004 Adoption Agreement, which only eliminated Verizon’s

unbundling obligation under § 251(c)(3).

This argument, however, ignores both the explicit language

of the 2002 Interconnection Agreement and the 2004 Adoption

Agreement, as well as the underlying litigation that led to the

2002 Agreement. As pointed out above, the only rates expressly

provided for entrance facilities in the 2002 Interconnection

Agreement were rates for unbundled facilities. And when

Verizon’s unbundling obligation was eliminated, so too were the

corresponding rates for unbundled elements. Thus, the only

other rates available for entrance facilities were tariff rates.

35
 Just as indicative of this point is the history of the

litigation leading to the 2002 Interconnection Agreement. That

Agreement, as well as similar agreements involving Verizon, was

created as a result of an FCC arbitration order. In re

Worldcom, Inc., 17 FCC Rcd. 27039 (2002). And paragraphs 210

through 217 of that order described the dispute between Verizon

and Cox (as well as other competitive LECs) as to

“Interconnection Transport,” with the competitive LECs asserting

that such interconnection had to be provided at unbundled

network rates, and Verizon arguing that Cox and the other

competitive LECs had to “purchase ‘entrance facilities and

transport for interconnection’ from its access tariffs.” Id.

¶ 210, at 27142 (emphasis added). These paragraphs of the FCC

order described the provision of interconnection exclusively in

the context of the purchase of unbundled elements pursuant to §

251(c)(3). See id. ¶ 215 & n.716, at 27144. Nowhere in this

discussion was there any reference to Cox or the other

competitive LECs having the right to purchase entrance

facilities for the limited purpose of interconnection pursuant

to § 251(c)(2). Entrance facilities were instead only discussed

in the order as unbundled network elements. See id. ¶¶ 210-

217, at 27142-46.

The FCC’s reasoning, which is based exclusively on §

251(c)(3), is clearly what gave rise to § 4.3.1 of the 2002

36
Interconnection Agreement. The FCC order defined the proper

rates at which Cox and other involved competitive LECs could

“order ‘[e]ntrance [f]acilities and transport for

[i]nterconnection.’” Id. ¶ 217, at 27145. This language is

nearly identical to § 4.3.1 of the 2002 Interconnection

Agreement, which allowed Cox to specify “an entrance facility

and transport” as its interconnection method. Based on this, it

is clear that § 4.3.3 of the 2002 Interconnection Agreement

provided for the purchase of entrance facilities as unbundled

network elements, and the obligation to provide unbundled

network elements at cost-based rates was eventually removed from

the contract through the 2004 Adoption Agreement.

This interpretation is also supported by Exhibit A itself.

All of the cost-based rates in Exhibit A for “entrance

facilities” were listed under the heading “Unbundled Transport.”

Yet CoreTel now wants to apply those rates to the purchase of

entrance facilities that it explicitly claims were not

unbundled. It fails to recognize that Exhibit A’s rates for

unbundled elements were removed from the Agreement through the

2004 Adoption Agreement, and they were never applicable to

entrance facilities except as an unbundled element. And absent

any Exhibit A rate for entrance facilities, the only rates given

by the 2002 Interconnection Agreement for entrance facilities

were tariff rates. See 2002 Interconnection Agreement, § 4.3.3.

37
 There is a reason why the 2002 Interconnection Agreement

did not contain special rates for entrance facilities provided

solely for interconnection. Before the FCC’s 2003 Triennial

Order, the general understanding was that incumbent LECs had no

obligation under § 251(c)(2) to provide entrance facilities at

cost-based rates. That section was limited to

“interconnection” -- a service, not a facility. Entrance

facilities were always provided as unbundled network elements

under § 251(c)(3). This was rational, as it allowed the

competitive LECs the greatest flexibility in using the entrance

facilities. This pre-2003 understanding of the law was

explicitly affirmed by the FCC in its amicus brief in Talk

America, to which the Supreme Court deferred as an agency

interpretation. That brief stated:

The FCC’s interconnection rules, which were adopted in
1996, do not expressly require incumbents to provide
entrance facilities to satisfy their interconnection
obligations under Section 251(c)(2). That is because,
until 2003 -- when the FCC eliminated unbundled access
to entrance facilities in the Triennial Review
Order -- a competitive LEC typically would elect to
order a cost-priced entrance facility under Section
251(c)(3) since an unbundled network element can be
used more expansively than the same facility provided
solely for interconnection under Section 251(c)(2).
Only after the FCC eliminated access to entrance
facilities as unbundled network elements did it have
occasion to clarify, in the Triennial Review Order and
the Triennial Review Remand Order, that Section
251(c)(2) gives competitive LECs a right of access to
such facilities for interconnection at cost-based
rates.

38
Brief for the United States as Amicus Curiae Supporting

Petitioners, at 22 n.6, Talk America, 131 S. Ct. 2254 (Nos. 10-

313, 10-329) (emphasis added) (citations omitted).

Thus, because § 251(c)(2) was never understood in 2002 to

require the provision of entrance facilities, only

“interconnection” as a service, the majority has no support for

reading the 2002 Interconnection Agreement now to include such

an obligation on Verizon. Instead, the drafting parties

uniformly treated entrance facilities in the only way known at

the time -- as unbundled elements to be provided under §

251(c)(3). And they included provisions in § 11.6 and Exhibit A

allowing for the leasing of entrance facilities as such.

CoreTel points to § 27.1 of the 2002 Interconnection

Agreement to suggest that Verizon’s obligations changed with the

2003 Triennial Order. That paragraph provided:

Each Party shall remain in compliance with
[a]pplicable . . . federal, state, and local laws,
rules and regulations in the course of performing this
Agreement. Each Party shall promptly notify the other
Party in writing of any governmental action that
suspends, cancels, withdraws, limits, or otherwise
materially affects its ability to perform its
obligations hereunder.

But CoreTel can point to no change in the law that “materially

affect[ed]” either party’s “ability” to perform its obligations

under the Agreement. The Telecommunications Act always provided

that the rates to be paid to an incumbent LEC were subject to

39
negotiation, even as the Act requires that any rates be

reasonable and nondiscriminatory. See 47 U.S.C. § 252(a), (d).

Moreover, CoreTel’s reading of § 27.1 cannot be squared with

other provisions of the 2002 Interconnection Agreement. For

example, § 27.3 -- which required the parties to negotiate in

good faith to incorporate changes in the law -- would be

rendered superfluous under CoreTel’s reading of § 27.1.

Finally, CoreTel argues that even if the 2002

Interconnection Agreement did not explicitly allow for its

leasing of entrance facilities at the cost-based rates listed in

Exhibit A, the 2004 Adoption Agreement effectively incorporated

the FCC’s 2003 Triennial Order into the contract to allow it to

do so. This claim, however, finds no support in the language of

the 2004 Adoption Agreement. That Agreement stated that it

“does not include adoption of the provisions imposing an

unbundling obligation that no longer applies” after the 2003

Triennial Order. This is a limitation on the terms of the

contract, not an addition to it. If no § 251(c)(2) cost-based

pricing duty can be found in the 2002 Interconnection Agreement,

the 2004 Adoption Agreement does not add one. Indeed, it adds

nothing at all. Rather, it strikes out the unbundling

requirements in § 11 of the 2002 Interconnection Agreement

because those provisions related to obligations that “no longer

40
appl[ied]” following the 2003 Triennial Order, just as the 2004

Adoption Agreement explicitly stated.

If CoreTel had wanted to change the terms of the 2002

Interconnection Agreement as modified by the 2004 Adoption

Agreement, it could have done so at any point under § 27.3.

Indeed, it could have sought an entirely new Agreement with

Verizon in 2004 rather than agreeing to adopt one that was

drafted prior to the 2003 Triennial Order. But CoreTel did none

of these things, and thus it is bound by the language of the

2002 Interconnection Agreement as modified by the 2004 Adoption

Agreement. See In re Core Commc’ns, Inc., 18 FCC Rcd. 7568,

7582 § 32 (2003) (holding that a party to an Interconnection

Agreement “cannot rely upon the general section 251 duties to

circumvent the terms of its agreement”).

In sum, based on the language of the 2002 Interconnection

Agreement and the 2004 Adoption Agreement, as well as the

context of those Agreements, I cannot conclude that CoreTel is

now entitled to pay only cost-based rates for its lease of

entrance facilities for interconnection. Rather, as the

Agreements provide, it is required to pay for those entrance

facilities at tariff rates, the only other rate provided for in

the Agreements.

I would accordingly affirm the judgment of the district

court in all respects.

41