ORAL ARGUMENT DOESN'T CLARIFY RECIPROCAL COMPENSATION

Global Naps (GN) squared off with FCC on reciprocal compensation in U.S. Appeals Court, D.C., Tues. over Bell Atlantic’s charge that Internet service provider (ISP) traffic provisions of GN’s tariff were illegal. Judges David Sentelle, Stephen Williams and Judith Rogers seemed to question why they were hearing case, asking in early Global Naps argument, “What can we do about it?” In oral argument, GN Counsel Christopher Savage said appeal was appropriate because FCC had acted inappropriately when it invalidated company’s tariff with no notice.

Judges asked whether Global Naps simply could amend invalidated tariff, just “fix it,” or whether Mass. ruling on conflict would give GN reciprocal compensation. Rogers asked whether retroactive costs of delivering Internet calls to ISPs could be included in future rates. GN counsel said tariff was retroactively invalid and company had no opportunity to make changes to satisfy FCC. Savage said Commission had no regulation allowing retroactive invalidation. Court asked why GN didn’t deal with all issues on reconsideration at FCC, and where did due process violation exist.

FCC attorney Lauren Bergold said Global Naps could have avoided whole situation if it had negotiated terms for reciprocal compensation in its agreement with Bell Atlantic. She said it was Global Naps’ choice to put conflict before Mass. Commission, and FCC gives that state precedence to rule on intercarrier compensation issue. Bergold said FCC ruled Global Naps’s tariff invalid when filed because company shouldn’t have filed federal tariff at all since Mass. hadn’t issued rules governing intercarrier compensation for ISP traffic. While FCC’s order sparking GN’s appeal focused on why tariff was invalid, including tariff language that violated FCC rules by alluding to Bell Atlantic-Global Naps interconnection agreement, Bergold focused on GN decision to put matter before Mass. Commission. She said FCC had authority to invalidate tariffs retroactively but was unable to provide applicable legal citation.