1717 Pennsylvania Avenue, N.W. 12 th Floor Washington, D.C November 6, 2014

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1 1717 Pennsylvania Avenue, N.W. 12 th Floor Washington, D.C Tel Fax James C. Falvey Phone: Notice of Ex Parte November 6, 2014 Ms. Marlene H. Dortch Secretary Federal Communications Commission th Street SW Washington, DC Re: Notice of Ex Parte Communication (CC Docket No ; CC Docket No ; WC Docket No ; WC Docket No ; WC Docket No ; WC Docket No ; GN Docket No ) Dear Ms. Dortch: On November 4, 2014, Kyle Bertrand, VP, Network Planning and Regulatory, Broadvox- CLEC, LLC ( Broadvox ), and the undersigned met with Amy Bender, Wireline Legal Advisor to Commissioner O Rielly. Broadvox provided the attached presentation and discussed the importance of the VoIP Symmetry Rule to Broadvox as an over-the-top VoIP provider. Broadvox emphasized the need to ensure that any clarifications the Commission makes to the Connect America Fund Order ( CAF Order ) 1 are retroactive to the effective date of that order. Broadvox also discussed the fact that Verizon s effort to exclude originating 8YY access from the VoIP Symmetry Rule is not justified. Excluding such traffic would create the very asymmetry that the Commission intended to avoid, by permitting traditional local exchange carriers to collect full originating access on 8YY calls, but precluding competitive carriers such as Broadvox partnered with VoIP provider partners from collecting the same charges. Moreover, interexchange carriers (IXCs) that deliver calls to their 8YY customers will still collect the same rates from those customers, but would pay a discounted originating access rate on every such call that happens to originate from a VoIP provider customer. The Commission should ensure that IXCs do not receive such a windfall and that VoIP providers have an even chance to compete by guaranteeing equivalent compensation for all types of traffic. Verizon provides neither legal nor factual support for its new proposal to exclude originating access from the VoIP Symmetry Rule. Verizon s proposal is predicated on the 1 Connect America Fund, Report And Order And Further Notice Of Proposed Rulemaking, 26 FCC Rcd (2011) ( CAF Order ).

2 Ms. Marlene H. Dortch November 6, 2014 Page 2 of 2 assumption that originating access charges remain at their pre-caf Order levels, 2 which is simply not true. The Commission in the CAF Order reduced originating access rates for intrastate VoIP-PSTN traffic and only VoIP-PSTN traffic is subject to the VoIP Symmetry Rule from their previous, significantly higher intrastate levels to much lower interstate levels. 3 More importantly, there was never any consideration given in the CAF Order to excluding originating access from the VoIP Symmetry Rule. The VoIP Symmetry Rule has been in effect for more than two and a half years and yet Verizon provides no evidence whatsoever of any actual abuses of originating access traceable to the VoIP Symmetry Rule. Verizon s fearmongering its claim, for example, that Commission action could open the floodgates to new robocall schemes, is not a substitute for record evidence that the VoIP Symmetry Rule has increased arbitrage. In addition, even if there were evidence that there is a higher incidence of access stimulation among over-the-top providers than other providers (which there is not), the Commission has already addressed access stimulation in the CAF Order, 4 and those rules would apply with equal, symmetrical force to all providers, over-the-top or otherwise. Verizon s proposal to exclude originating access from the VoIP Symmetry Rule is a solution in search of a problem and should not be addressed in the Commission s impending order. As required by Section (b), this ex parte notification is being filed electronically for inclusion in the public record of the above-referenced proceedings. If you have any questions or require additional information, please do not hesitate to contact me at Sincerely, Enclosure /s/ James C. Falvey James C. Falvey Counsel for Broadvox-CLEC, LLC cc: Amy Bender Kyle Bertrand 2 Letter from Alan Buzacott, Executive Director, Federal Regulatory Affairs, Verizon to Ms. Marlene H. Dortch, Secretary, FCC (Nov. 5, 2014), at 2. 3 CAF Order, Id.,

3 Commission Order to Clarify and Reaffirm the VoIP Symmetry Rule: 47 C.F.R (b) October 30, 2014 Kyle Bertrand Vice President Network Planning & Regulatory Broadvox CLEC, LLC James C. Falvey, Esq. Eckert Seamans Cherin & Mellott 1717 Pennsylvania Ave., NW 12 th Floor Washington, D.C

4 The Commission s Ruling Must be Retroactive to the Effective Date of the VoIP Symmetry Rule The VoIP Symmetry Rule was the only issue that AT&T appealed in the Connect America Fund Appeal AT&T lost on appeal at the 10 th Circuit AT&T and Verizon are trying to re litigate this issue before the Commission but the Commission has already made it clear that end office charges are due for Over the Top (OTT) traffic Because AT&T and Verizon are filing disputes based on their unique and inaccurate interpretation of the VoIP Symmetry Rule, the Commission needs to clarify that rule as requested by Level 3 (see 2/28/14 ex parte letter) and such clarification must be retroactive to the effective date of the Rule 2

5 Broadvox CLEC, LLC v. AT&T Corp. Case No. 8:13 CV (D. Md.) Broadvox filed a collections action against AT&T Corp. in April 2013 in federal court to collect its unpaid access charges Broadvox is seeking to collect its past due charges in federal court and not through FCC Enforcement or any other mechanism At the Court s request, the parties recently briefed whether a primary jurisdiction referral would be appropriate Without near term reaffirmation and clarification of the VoIP Symmetry Rule, AT&T s illegal withholding of Broadvox s access charges dating back to January 2012 could extend for years into the future By issuing a clarification order, the Commission would eliminate the ability of AT&T and Verizon to continue to misread the VoIP Symmetry Rule and withhold millions of dollars from their much smaller competitors 3

6 Prospective Only Application Would be Devastating for Over the Top Providers like Broadvox Broadvox would be devastated by a ruling that the requested reaffirmation and clarification has prospective effect only Broadvox has over $7M in retrospective billings at stake AT&T would be rewarded for its three year self help campaign Self help has been discouraged by the Commission (CAF Order, 700) If AT&T had an issue with the VoIP Symmetry Rule, it should have come to the Commission for clarification rather than exercising self help 4

7 Retroactivity is the Norm in Agency Adjudications Retroactivity is the norm in agency adjudications. AT&T v. FCC, 454 F.3d 329, 332 (D.C. Cir. 2006) The Commission s Order will not change settled or established law (Id.) The disputes AT&T had with six or more carriers meant that AT&T could not reasonably rely on its novel interpretation of the VoIP Symmetry Rule. Verizon Tel. Cos. v. FCC, 269 F.3d 1098, 1111 (D.C. Circ. 2001)( Because the object of the [petitioners ] reliance was neither settled... nor wellestablished, we are skeptical that retroactive liability against the [petitioners] would actually impose a manifest injustice. ) AT&T and Verizon knew that the Commission might find that their interpretation of the Rule is completely contrary to the Commission s intention and would then apply the presumption of retroactivity. Qwest v. FCC, 509 F.3d 531, 540 (D.C. Cir. 2007) ( The mere possibility that a party may have relied on its own (rather convenient) assumption that unclear law would ultimately be resolved in its favor is insufficient to defeat the presumption of retroactivity when that law is finally clarified. ) 5

8 Verizon s Conduct Demonstrates That It Initially Interpreted the VoIP Symmetry Rule Like Broadvox AT&T and Verizon cannot claim that the VoIP Symmetry Rule read clearly in their favor because for years Verizon interpreted it like Broadvox Verizon paid Broadvox s end office charges for services rendered for two whole years from January 2012 through January 2014 Verizon also paid Bandwidth s charges during the same two year period (Bandwidth 10/22 ex parte letter, at 6) It appears that Verizon only began disputing end office switching after it became aware of AT&T s self help campaign AT&T and Verizon cannot claim that the VoIP Symmetry Rule clearly required denial of end office charges to OTT providers If there was any ambiguity in the VoIP Symmetry Rule s application to end office switching charges, clarification of that ambiguity must be retroactive to the effective date of the Rule 6