Board of Contract Appeals General Services Administration Washington, D.C. 20405 _________________________________________ MOTION FOR RECONSIDERATION DENIED: July 12, 2000 _________________________________________ GSBCA 15139 SPRINT COMMUNICATIONS COMPANY, L.P., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. David S. Cohen and John J. O'Brien of Cohen Mohr, Washington, DC; and George J. Affe and Anthony L. Cogswell of Sprint Communications Company, L.P., Herndon, VA, counsel for Appellant. John E. Cornell, Michael J. Ettner, and Michael D. Tully, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, NEILL, and DeGRAFF. NEILL, Board Judge. The General Services Administration (GSA) moves that we reconsider our decision granting a motion for summary relief on the issue of entitlement filed in this case by appellant, Sprint Communications Company, L.P. (Sprint). Sprint Communications Co. v. General Services Administration, GSBCA 15139 (Apr. 26, 2000). Upon consideration of the arguments advanced by GSA in support of this request and by Sprint in opposing it, we deny GSA s motion. GSA contends that reconsideration of our decision is warranted on two grounds. First, a decision rendered by the Court of Appeals for the District of Columbia Circuit two days after the Board s decision is said to have eliminated the legal basis upon which the Board s holding rests. Second, Sprint, according to GSA, is not entitled to the relief it seeks since it bargained away its mandatory contributions to the Universal Service Fund (USF) when it entered into its Federal Telecommunications System (FTS) 2000 contract with GSA. 2 We turn to the first argument advanced by GSA. It is of course true that the Court of Appeals for the District of Columbia Circuit in its decision of April 28, 2000, upheld an order of the Federal Communications Commission (FCC) calling for mandatory detariffing of interstate, domestic, interexchange services of nondominant carriers. MCI WorldCom, Inc. v. FCC, 209 F.3d 760 (D.C. Cir. 2000). It is likewise obvious that one significant result of this order, once it is implemented, will be that detariffed carriers will no longer be able to rely upon the filed rate doctrine.[foot #] 1 From these facts alone, however, we are not prepared to conclude, as GSA has, that with the MCI WorldCom decision, the filed rate doctrine has been abandoned by the FCC and by its appellate authority. See Respondent s Motion for Reconsideration at 6. Whatever the future of the filed rate doctrine may be, our concern here is with its application to a situation which existed prior to the court s decision in MCI WorldCom. We find nothing in that decision which suggests that the doctrine is deemed either by the court or by the FCC to be now wholly invalid or inapplicable to situations which existed prior to the date of the court s decision. GSA is apparently of the opinion that, because the FCC order, which was upheld by the court in April 2000, was issued in 1996, this order governed in December 1997 when Sprint amended its filed tariff to include USF charges. See Respondent s Motion ----------- FOOTNOTE BEGINS --------- [foot #] 1 This particular order was issued by the FCC after Congress amended the Telecommunications Act of 1934 with passage of the Telecommunications Act of 1996. Pub. L. No. 104-104, 110 Stat. 56 (1996). The Act, as amended, gives the FCC specific authority, under certain circumstances, to forbear in the application of requirements, otherwise applicable under the Act, for the filing of tariffs. See 47 U.S.C. 160(a) (Supp. III ___ 1997). Upon passage of the Act s amendments in 1996, the FCC moved once more to detariff the interstate, domestic, interexchange services of nondominant carriers. With its Notice ______ of Proposed Rulemaking, 11 FCC Rcd. 7141 (1996), the FCC ______________________ tentatively concluded that the Act, as amended, now required it to forbear from applying the tariffing requirement to nondominant carriers and that permitting carriers to file tariffs at all would not be in the public interest. For that reason the Commission advised that it intended to implement mandatory detariffing by forbearing from applying section 203(a) of the Act. Following a comment period, the FCC confirmed its decision and ordered mandatory detariffing. See Second Report and Order, ___ _______________________ 11 FCC Rcd. 20,730 (1996). It was this order as well as two related reconsideration orders which the Court of Appeals reviewed in the recent decision which GSA now cites to us. See ___ MCI WorldCom, 209 F.3d at 762. ____________ ----------- FOOTNOTE ENDS ----------- 3 for Reconsideration at 7. We disagree. As noted in note 19 of our original decision, the FCC order of 1996 calling for mandatory detariffing was stayed by the Court of Appeals for the District of Columbia Circuit. The stay was issued on February 13, 1997. MCI WorldCom, Inc. v. FCC, No. 96-1459 (D.C. Cir. Feb. 13, 1997) (order granting stay). As the court itself has noted, this action had the effect of preserving a status quo which was favorable to the petitioners for so long as it was maintained. MCI WorldCom, 209 F.3d at 764. The stay remained in effect until May 1, 2000, when it was lifted. MCI WorldCom, Inc. v. FCC, No. 96-1459 (D.C. Cir. May 1, 2000) (order lifting stay). The FCC has recognized that the court's stay rendered its order inoperative. On May 9, 2000, it issued a public notice with the following caption: Public Notice: Domestic, Interexchange Carrier Detariffing Order Takes Effect; Common Carrier Bureau Implements Nine-Month Transition Period; Comment Sought On Modifications To Transition Plan. This notice reads in part: On May 1, 2000, the Commission s 1996 Order detariffing the interstate, domestic, interexchange services of nondominant interexchange carriers (IXCs) became effective. In this Notice, the Common Carrier Bureau (1) implements a nine-month transition period ending January 31, 2001, in the manner specified by the Commission in the Detariffing Order, (2) seeks comment on possible modifications to the requirements for that transition period, and (3) provides technical guidance for carriers with respect to implementation of detariffing. . . . . By this Notice, the Bureau establishes a new transition period beginning May 1, 2000 and ending January 31, 2001. Carriers may file new and revised tariffs for mass market interstate, domestic interexchange services during the transition period. Carriers may not file new or revised interstate, domestic, interexchange tariffs for contract tariff offerings and other long-term service arrangements. Pending public comment and further consideration by the Bureau, this prohibition applies to arrangements that bundle domestic and international services. Carriers must cancel, by the end of transition period, the tariff offerings that are subject to the Detariffing Order. 4 Appellant s Opposition to Respondent s Motion for Summary Relief, Exhibit 4 at 1-3 (footnotes omitted). Given the new schedule established by the FCC in this public notice for implementing its order of 1996 and the rules set out in the notice for filing, revising, and canceling tariffs during the transition period, it appears obvious to us that the FCC order of 1996 had no effect on Sprint s amendment of its FTS2000 tariff in December 1997. Indeed, the order now will not even be in full effect until the transition period concludes on January 31, 2001. In short, respondent has provided us with nothing to demonstrate that the filed rate doctrine is not applicable in those situations where filed tariffs remain in effect either before or after the MCI WorldCom decision of April 28, 2000. Sprint's amended tariff regarding services rendered under its FTS2000 contract was in effect in 1998 and had not been challenged at the FCC. As we concluded in our decision, at that particular time, carriers were required by law to submit tariffs to the FCC, properly filed tariffs had the force and effect of law, and carriers were strictly prohibited from charging rates other than those contained in their filed tariffs. Neither the court's decision in MCI WorldCom nor the FCC's subsequent actions lead us to believe otherwise. We, therefore, remain convinced that the determination of applicable prices for services rendered by Sprint under its FTS2000 contract in 1998 should be based upon an application of the filed rate doctrine. GSA's second argument for why the Board should reconsider and reverse its original decision is that Sprint bargained away its mandatory contributions to the USF when it entered into its FTS2000 contract with GSA. This second argument is based upon the mistaken understanding that the Board, in granting Sprint's motion for summary relief, has somehow reformed the original contract, thus transforming it from a contract based upon a non- tariffed proposal into a tariff-based contract. This reformation, however, according to GSA, is inadequate and less than sufficient because the Board, in reforming the contract, should have recognized that the price stabilization provisions of Clause H.18 regarding tariff-based offers were now applicable to Sprint. Thus, the contract, as properly reformed, would clearly indicate that Sprint had "bargained away" its right to collect reimbursement for its USF payments and was obliged instead to defend its fixed price tariff and resist any possible increase in it which might be authorized by the FCC. Respondent's Motion for Reconsideration at 9-10. We are not aware of any request from the parties to reform their contract and have never had any intention of ordering reformation. In this particular case, reformation is not a feasible remedy. From the uncontested facts, it is clear that, 5 at the time the contract was negotiated, neither party had the actual intention of treating Sprint's offer as a tariffed proposal. Neither are we convinced, through the application of a principle akin to that of cy pres for the reformation of charitable gifts and in trusts, that we could or should proceed with reformation of the contract by substituting some constructive intent close to but not the same as the actual original intent of the parties. See Respondent's Motion for Reconsideration at 9. Respondent misunderstands our decision. Sprint's contract rates became tariff rates not because we reformed the parties' contract in April 2000 but because of the rulings of the Court of Appeals for the District of Columbia Circuit in 1985 and 1994, the ruling of the Supreme Court in 1994, and Sprint's subsequent tariff filing in 1995 to comply with the law as ultimately interpreted by the Supreme Court. This tariff governed from 1995 forward by operation of law and our decision simply reflects this fact. We are unpersuaded by either argument advanced by GSA that our decision on entitlement should be reconsidered. The motion for reconsideration is, therefore, DENIED. The parties are directed to proceed with the formulation of a proposed schedule for further proceedings on quantum as originally ordered by the Board on May 5, 2000. The date for submission, as first established in that order, is changed from May 19 to July 26, 2000. ________________________ EDWIN B. NEILL Board Judge I concur: _________________________ ANTHONY S. BORWICK Board Judge DeGRAFF, Board Judge, concurring. GSA's arguments in support of its motion for reconsideration do not address the rationale that I set out in my concurring opinion. Therefore, I agree that reconsideration is not warranted. 6 ______________________ MARTHA H. DeGRAFF Board Judge