• On October 8, 2010, the US Court of Appeals for the Ninth Circuit largely affirmed the dismissal of Telesaurus VPC’s suit against Radiolink Corp. over certain licenses for VHF Public Coast radio frequencies in Phoenix. Telesaurus’s predecessor had won the five licenses at issue in a competitive auction in 1999 – an auction in which Radiolink had made a losing bid. But three months later, Radiolink applied to the FCC for the same (and other) frequencies, and the FCC granted the application. Radiolink used those frequencies for its two-way mobile radio business in Phoenix until at least 2005, at which time Telesaurus reported the issue to the FCC. The FCC ultimately replaced Telesaurus’s frequencies with others in Radiolink’s license. Two years later, Telesaurus sued Radiolink for various claims under the Communications Act (47 U.S.C. §§ 301, 308, 309, 312(a), and 503(b)), as well as state-law claims for conversion, unjust enrichment, and intentional interference with prospective economic advantage. The appeals court agreed with the District Court of Arizona’s dismissal of the suit on the ground that Telesaurus had not properly alleged that Radiolink is a “common carrier” subject to suit under the Act. Specifically, the trial court found that the “complaint does not adequately allege that Radiolink’s service is interconnected or pending interconnection … or that it is provided to the public or the other users specified in § 332(d)(1).” The Ninth Circuit found, however, that the trial court had given undue deference to the FCC’s notation of “Regulatory Status: [Private land Mobile Radio Service]” on Radiolink’s license in deciding that Telesaurus could not properly plead factual allegations to establish Radiolink’s common-carrier status. Thus, the Ninth Circuit reversed that portion of the opinion and remanded the case to the trial court so that Telesaurus would be given an opportunity to replead its claims. If Telesaurus can plead sufficient facts to establish Radiolink’s common-carrier status, the surviving suit will proceed on the federal claims. Both the trial court and the Ninth Circuit held that the state-law claims are preempted under 47 U.S.C. § 332(c)(3)(A). Telesaurus VPC, LLC v. Power, Case No. 09-15446, 2010 WL 3928945 (9th Cir.).
  • On October 7, 2010, the Court of Appeals of Michigan reversed a decision by the Michigan Public Service Commission (PSC) in which it adopted a mediator’s clarification of a settlement of an ICA dispute between CLEC Quick Communications and ILEC AT&T. The dispute arose over AT&T’s provision of Centrex as an unbundled network element. Because an intervening change in both FCC and Michigan policy had rendered Centrex service not available on an unbundled basis, the Court of Appeals concluded that “the recommended settlement cannot be enforced as written because it provided for something that does not exist. There is no wholesale UNE-based Centrex service available under [the tariff referenced in the mediator’s “clarification” of the settlement agreement].” The court found that both carriers contributed to the confusion: “we are not blind to the sophistication of the parties before us. Each presumably knew of the potential for confusion by the other.” The court concluded that, because there was no meeting of the minds on this material term of the settlement agreement, “the only adequate remedy is to hold that the recommended settlement is unenforceable.” The court remanded the case to the PSC “for a new alternative dispute resolution process, which shall be conducted before a different mediator.” Quick Commc’ns, Inc. v. Mich. Bell Tel. Co., No. 286679, 2010 WL 3928768 (Mich. Ct. App.).