Cbeyond Communications, LLC v. Sheahan

Cbeyond provides telecommunications service to small businesses using telephone lines. AT&T Illinois provides similar service on a larger scale. Their networks are interconnected; a new entrant (Cbeyond) may connect with existing local exchange carriers, 47 U.S.C. 251; if the parties are unable to agree on terms the issue is referred to arbitration. In 2004, the Illinois Commerce Commission (ICC) approved the agreement between Cbeyond and AT&T. In 2012 Cbeyond complained to the ICC: when Cbeyond leases new digital signal level loop circuits, AT&T charges a separate price for “Clear Channel Capability” (CCC) for the loops. CCC codes the electrical pulses in a line to improve data streaming. Cbeyond argued that there was no extra work involved. The Seventh Circuit affirmed rejection of Cbeyond’s claims, noting that the parties’ agreement designates CCC as an “optional feature” available “at an additional cost” and that some of the loops did not have CCC built in. The court noted the lack of information about how AT&T charges others for CCC or whether AT&T’s charges are inconsistent with 47 C.F.R. 51.505, which constrains incumbent carriers to lease network elements to newcomers at a price slightly higher than the incumbent’s marginal cost. Finding no violation of federal law, the court called the claim “a dispute over a price term in a contract,” a matter of state law. “Cbeyond has imposed an excessive and unnecessary burden on the district court by bringing this sloppy lawsuit.” View "Cbeyond Communications, LLC v. Sheahan" on Justia Law