All American Telephone Company, Inc. v. FCC.

• Author: Du, Senrui

867 F.3D 81 (D.C. CIR. 2017)

1. INTRODUCTION

   In All American Telephone Company, Inc. v. FCC, (50) the Court of Appeals for the District of Columbia Circuit granted in part and denied in part petitions for review of the FCC's order awarding damages and treading on the merits of the companies' state law claims. (51)

2. BACKGROUND

   The FCC regulates common-carrier providers of wired telephone services, including the fees for "exchange access services" rendered for long distance telephone calls. (52) Those fees are often referred to as "access charges." (53) When a person places a long-distance call, a local exchange carrier operating in the caller's geographic area will route the call to an interexchange carrier. (54) That exchange carrier will connect the call to the recipient's local exchange carrier and pay an access charge to the local carrier for the connection service. (55)

   Some local exchange carriers sought to artificially inflate the number of local calls they could connect, thereby increasing both the call volume and the rates that they could charge; this scheme is known as "traffic pumping." (56) Specifically, a local exchange carrier would enter into a relationship with a company that generates a high volume of telephone calls. (57) The local carrier would forgo charging its partner for the phone calls that came in, and would even pay the partner share of long-distance access rates it charged the interexchange carriers. (58) Though the local carrier and its phone-call-generating partner benefited from traffic pumping, the public and the interchange carriers bore the loss by paying significant amounts to the local exchange carriers in the form of artificially inflated access charges to complete the long-distance calls. (59) In 2010, the FCC issued a series of orders concluding that such traffic-pumping schemes were unlawful under Section 201(b) and 203(c) of the Communications Act, 47 U.S.C. [section][section] 201(b), 203(c). (60) The Commission ruled in particular that carriers could not charge interexchange carriers to connect long-distance calls to a non-paying end user. (61)

   In the early 2000s, Beehive Telephone Company, Inc. (Beehive) created competitive local exchanges--All American Telephone Co., e-Pinnacle Communications, Inc. and Chasecom (collectively, "the Companies"). (62) then had the Companies engage in a traffic-pumping scheme. (63) The Companies have only served conference-calling companies, and have never charged them...