Prison Phone Justice

Robert W. Quinn, Jr.
Senior Vice President
Federal Regulatory and
Chief Privacy Officer

AT&T Services, Inc.
1120 20th St., NW, Suite 1000
Washington, DC 20036
T: 202 457.3851
F: 202 457.2020

September 6, 2012

VIA ELECTRONIC SUBMISSION
Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, SW – Lobby Level
Washington, DC 20554
Re:

Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, CC Docket 96-128

Dear Ms. Dortch:
On Wednesday, September 5, 2012, Celia Nogales and I, on behalf of AT&T, met with Angela
Kronenberg, Wireline Legal Advisor to Commissioner Mignon Clyburn, regarding the Petition for
Declaratory Ruling of the Michigan Pay Telephone Association (MPTA) in the above-referenced
proceeding. The attached was used as a framework for our discussion. During the meeting, we argued
that the Commission should deny the MPTA’s petition and explained that, in all events, MPTA’s request
for refunds was barred as a matter of black letter law by the filed rate doctrine and under the principles of
res judicata and collateral estoppel.
Pursuant to section 1.1206 of the Commission’s rules, this letter is being filed electronically with
your office for inclusion in the public record of the above referenced proceeding. If you have any
questions or need additional information, please do not hesitate to contact me.
Sincerely,

Robert W. Quinn, Jr.
cc: Angela Kronenberg

August 14, 2012
Electronic Filing
Marlene Dortch, Secretary
Federal Communications Commission
445 Twelfth Street, S.W.
12th Street Lobby, Room TW-A325
Washington, D.C. 20554
Re:

Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, CC Docket 96-128

Dear Ms. Dortch:
I write on behalf of AT&T with regard to the Petition for Declaratory Ruling filed by the
Michigan Pay Telephone Association (“MPTA”). AT&T filed joint comments with Verizon
(filed June 22, 2006), along with separate comments (filed June 22, 2006) and reply comments
(filed July 6, 2006) in response to the petition. The purpose of this letter is to refresh the record;
to summarize the reasons that MPTA’s petition should be denied; and to make clear that, even if
the Commission addresses the validity of the analysis underlying the decision of the Michigan
Public Service Commission (“MPSC”) that MPTA purports to challenge, any relief that the
MPSC could order in response would be prospective only.
First, the Commission should dismiss or deny MPTA’s petition because it is inconsistent
with the Commission’s own determination that the states, not the Commission, are responsible
for application of the Commission’s pricing standards to state payphone line rates. The
Commission – over the objections of independent payphone providers (“IPPs”) – refused to
require the filing of federal payphone line tariff, holding that the Commission would “rely on the
states to ensure that the basic payphone line is tariffed by the LECs in accordance with the
requirements of Section 276.”1 The Commission has indicated that it would not take over that
state commission role unless state commissions are “unable” to carry it out.2 That is not the case

1

Order on Reconsideration, Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996, 11 FCC Rcd 21233, 21308,
¶ 163 (1996).

Marlene Dortch, Secretary
August 14, 2012
Page 2
here: MPTA presented the same arguments to the MPSC that it seeks to present to the
Commission; the MPSC considered and treated as binding all requirements of federal law.
Second, MPTA’s challenge to the MPSC’s 2004 order and 2005 denial of rehearing is
barred by res judicata. MPTA obtained judicial review of the MPSC’s orders by filing an action
in the Michigan Court of Appeals; in that proceeding, MPTA raised its claims that the MPSC’s
orders approving AT&T’s rates were contrary to federal law. A three-judge panel of the
Michigan Court of Appeals unanimously upheld that MPSC order.3 The Michigan Supreme
Court then denied MPTA’s Petition for Leave to Appeal.
For reasons AT&T has explained at length elsewhere, MPTA’s effort to mount a
collateral challenge to the MPSC’s order before the Commission is therefore barred by principles
of claim and issue preclusion – i.e., res judicata and collateral estoppel.4 “A fundamental precept
of common-law adjudication, embodied in the related doctrines of collateral estoppel and res
judicata, is that a right, question or fact distinctly put in issue and directly determined by a court
of competent jurisdiction . . . cannot be disputed in a subsequent suit between the same parties or
their privies.” Montana v. United States, 440 U.S. 147, 153 (1979) (internal quotation marks
omitted) (alteration in original). “Under res judicata, a final judgment on the merits bars further
claims by parties or their privies based on the same cause of action. Under collateral estoppel,
once an issue is actually and necessarily determined by a court of competent jurisdiction, that
determination is conclusive in subsequent suits based on a different cause of action involving a
party to the prior litigation.” Id. (citations omitted).
All the requirements for application of res judicata (and for collateral estoppel) are met
here. MPTA was a party to the earlier litigation before the Michigan Court of Appeals, and it is
pursuing precisely the same claims that were rejected by that court – that is, that the MPSC’s
orders were inconsistent with federal law – and the state courts had jurisdiction over the
providers’ claims, including the federal claims. As the Supreme Court has said, a “final
judgment in one State, if rendered by a court with adjudicatory authority over the subject matter
and persons governed by the judgment, qualifies for recognition throughout the land. For claim
and issue preclusion (res judicata) purposes, in other words, the judgment of the rendering State
gains nationwide force.” Baker by Thomas v. General Motors Corp., 522 U.S. 222, 233 (1998)
(emphasis added; footnote omitted); see also Bath Iron Works Corp. v. Director, Office of
Workers’ Comp. Programs, 125 F.3d 18, 20-21 (1st Cir. 1997). Because MPTA has already
litigated its federal-law challenge to the MPSC’s orders and lost, those claims are forever barred,
in whatever tribunal MPTA seeks to raise them.

2

Memorandum Opinion and Order, Wisconsin Public Service Commission; Order Directing
Filing, 17 FCC Rcd 2051, 2056, ¶ 15 (2002) (“Wisconsin Order”).
3

See SBC Michigan v. Michigan Pub. Serv. Comm’n, Nos. 254980 & 261341, 2006 Mich. App.
LEXIS 2845 (Sept. 28, 2006).
4

The issue is discussed in a White Paper jointly filed by AT&T and Verizon in this docket on
March 23, 2009.

Marlene Dortch, Secretary
August 14, 2012
Page 3
Third, and in any event, as AT&T explained in its June 22, 2006, comments, the MPSC’s
2004 decision is fully consistent with the New Services Test and the guidance provided by the
Commission in the Wisconsin Order. The MPSC relied on expert testimony and this
Commission’s prior orders applying the New Services Test in finding that the overhead loading
factor for AT&T’s usage-based services was consistent with overhead loading implied for
AT&T’s competitive services. MPTA’s arguments to the contrary ignore the record before the
MPSC and mischaracterize the MPSC’s decision. Precisely for this reason, the MPTA’s claims
were properly considered – and definitively rejected – by the Michigan Court of Appeals, which
had the full administrative record and all of the parties’ arguments before it.
Fourth, in light of the foregoing, even if the Commission were to address the merits of
MPTA’s claims, it could do so only for purposes of providing guidance with respect to any
claims to prospective relief that MPTA might pursue before the MPSC. The MPSC has
adjudicated AT&T’s tariffed rates and found them to be lawful under all applicable laws,
including the federal New Services Test pricing standard; that determination has been affirmed
by the Michigan court applying federal law. AT&T is therefore required to charge those tariffed
rates and entitled to rely on those rates until changed prospectively by the responsible regulator.
That principle – which is one aspect of the decades-old filed rate doctrine – applies under both
federal law and Michigan state law. See Arizona Grocery Co. v. Atchison, Topeka & Santa Fe
Ry., 284 U.S. 370 (1932); Detroit Edison Co. v Public Serv. Comm’n, 416 Mich. 510, 523; 331
N.W.2d 159 (1982). Accordingly, to the extent MPTA seeks to have the Commission somehow
undo the prior determinations of the MPSC and the adjudications by the Michigan courts, the
relief it seeks is contrary to remedial rules that protect the settled expectations of utilities and
rate-payers alike.
In accordance with 47 C.F.R. § 1.1206(b)(1), please include this letter in the record of
this proceeding. If you have any questions concerning this matter, please contact me at
(202) 326-7900.
Sincerely,
/s/ Aaron M. Panner
Aaron M. Panner
cc: Michael Steffen
Angela Giancarlo
Angela Kronenberg
Priscilla Delgado Argeris
Nicholas Degani
Pamela Arluk
Sean Lev
Joel Kaufman
Debra Weiner

Confirmation Page

E-filing Support Information
ECFS System Status
Consumer and Governmental
Affairs Bureau

Your submission has
been accepted
ECFS Filing Receipt Confirmation number:
2012814641872
Proceeding
Name

Subject

96-128

IMPLEMENTATION OF
THE PAY TELEPHONE
RECLASSIFICATION AND
COMPENSATION
PROVISION'S OF THE
TELECOMMUNICATIONS
ACT OF 1996

Contact Info

Name
AT&T
of
Filer:
Email
i.nogales@att.com
Address:Address
Address
1120 20th Street, NW
Line 1:
Address
Suite 1000
Line 2:
City:
Washington
State:
DISTRICT OF COLUMBIA
Zip:
20036

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exparte:
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Michigan ex
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