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CoreTel Virginia, LLC v. Verizon Virginia, LLC

United States Court of Appeals, Fourth Circuit

November 13, 2015

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

Argued September 16, 2015.

Page 979

[Copyrighted Material Omitted]

Page 980

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

ARGUED:

Edward Jay Tolchin, OFFIT KURMAN, P.A., 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:

Eduardo F. Bruera, KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for Appellees.

Before WILKINSON, NIEMEYER, and DUNCAN, Circuit Judges.

OPINION

Page 981

DUNCAN, Circuit Judge:

CoreTel Virginia, LLC (" CoreTel" ), a telecommunications company, has entered into interconnection agreements with Verizon Virginia, LLC and Verizon South, Inc. (collectively " Verizon" ) in accordance with the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (codified at 47 U.S.C. § 151 et seq.). In this second appeal arising out of a disagreement between CoreTel and Verizon over their respective obligations under those interconnection agreements, CoreTel disputes the district court's determination that it owes Verizon $227,974.22 for the use of Verizon's telecommunications facilities and $138,724.47 in late-payment fees. For the reasons that follow, we affirm.

I.

The Telecommunications Act of 1996 (the " Act" ) provides the context for this dispute between CoreTel and Verizon. As we explained more fully in our first opinion, the Act requires incumbent local exchange carriers such as Verizon to allow competitive local exchange carriers such as CoreTel to connect with end users over the incumbent's network. See CoreTel Va., LLC v. Verizon Va., LLC, 752 F.3d 364, 366-68 (4th Cir. 2014) (" CoreTel I" ). Using the procedures set out in section 252 of the Act, 47 U.S.C. § 252, carriers negotiate private agreements with each other that establish the rates and terms under which their networks will be interconnected. This case involves two such interconnection agreements: one between CoreTel and Verizon Virginia, and one between CoreTel and Verizon South (the " ICAs" ).[1]

The ICAs govern, among other aspects of interconnection, CoreTel's use of Verizon's physical telecommunications facilities. In CoreTel I, we addressed the parties' dispute over what rates CoreTel must pay to use Verizon's facilities. See 752 F.3d at 370-72. Verizon took the position that it was entitled to charge the rates set out in its tariffs filed with state and federal regulatory agencies, and billed CoreTel accordingly. CoreTel believed that the ICAs entitled it to purchase access to Verizon facilities at a lower " total element long-run incremental cost," or " TELRIC" rate.[2]

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CoreTel declined to pay not only the amounts set out in Verizon's tariff-based bills, but also the TELRIC-based amounts CoreTel contended should have been billed.

Verizon sued for breach of contract, bringing two claims associated with CoreTel's refusal to pay its tariff-based bills. First, Verizon sought a declaratory judgment that, if CoreTel failed to pay, Verizon was entitled to terminate CoreTel's service. Second, Verizon sought damages associated with CoreTel's breach of the ICAs.

In CoreTel I, we held that Verizon should have billed CoreTel for facilities at TELRIC rather than tariff rates, and that therefore " CoreTel was entitled to summary judgment in its favor on . . . Verizon's claim for declaratory relief relating to Verizon's facilities charges." 752 F.3d at 372. We did not, however, resolve Verizon's claim for damages associated with CoreTel's breach of the ICAs. Rather, we remanded that claim so that the district court could apply the proper TELRIC rates to calculate what CoreTel owes Verizon for use of Verizon's facilities. Id.

On remand, the district court held a bench trial, during which Verizon presented the tariff-based monthly bills it had issued to CoreTel and the " pricing attachments" to the ICAs. The monthly bills detail (1) what facilities Verizon provided to CoreTel; (2) whether the facility was provided by Verizon Virginia or Verizon South and, if split between those two, the percentage of the facility in each company's service area; and (3) for transport facilities billed by the mile, the number of transport miles provided. The ICAs' pricing attachments set out the TELRIC rates associated with each type of facility. Pricing is the only term on which the Verizon Virginia ICA and the Verizon South ICA differ; the ICAs are otherwise identical in all relevant respects.

From that evidence, Verizon developed a summary spreadsheet containing an entry for every facility it provided to CoreTel with the specific amount owed for each at TELRIC rates. J.A. 865-99. The entries, in total, reflected debts of $162,871.70 for Verizon Virginia facilities and $65,102.52 for Verizon South facilities, for a total of $227,974.22 in damages.

Verizon also contended that it was entitled to late-payment fees of 1.5% per month on the facilities charges under the ICAs. To calculate the amount, Verizon presented another summary spreadsheet detailing the total unpaid facilities charges accrued (i.e., the principal) for each month and the total late fees associated ...


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