virtual private network service which allows a subscriber to establish long distance lines to serve multiple locations without the need for dedicated private lines. Bobys Aff. P 8. At some point AT&T revised its SDN offering to provide "one-plus" dialing and large volume discounts under its Expanded Volume Plan ("EVP"). Id. Resellers such as NOS subscribe to SDN service and obtain large discounts under the EVP and then resell SDN service to businesses which do not have a sufficient volume of calls to qualify for the EVP discounts individually. By providing SDN service at a discount to these end user businesses, resellers can make a profit while the end users receive long distance service at a cost which is less than the cost of purchasing from AT&T directly. Id. P 9. F.C.C. Tariff No. 1 provides that payment of invoices is due upon presentation Declaration of Donna Stock, dated October 2, 1992 ("Stock Cert.") P 8. AT&T bills the reseller and the reseller bills its customer. For this purpose, NOS retained AT&T College and University Systems, an AT&T subsidiary, to bill NOS customers on NOS' behalf. Bobys Aff. P 10.
AT&T contends in support of its motion for partial summary judgment that it provided long distance telecommunications services to NOS and billed NOS under a filed tariff and that NOS has failed to pay for those services. This, AT&T urges, is sufficient to warrant partial summary judgment. NOS, not surprisingly, does not share this viewpoint. Rather, NOS claims that there is a genuine issue of material fact as to whether AT&T provided the network services consistent with its obligations under the tariff and that, until this factual dispute is settled, it need not pay the amounts which AT&T claims are due.
Prior to discussing the state of the factual record before the court, it is helpful to examine the parties' differing views as to the governing law. NOS does not take issue with the filed tariff doctrine, which provides that "a regulated carrier must charge the tariff rate established with the appropriate regulatory agency, even if it has quoted or charged a lower rate to its customer." Marco Supply Co. v. AT&T Communications, Inc., 875 F.2d 434, 436 (4th Cir. 1989) (emphasis in original); see also Louisville & Nashville Railroad v. Maxwell, 237 U.S. 94, 59 L. Ed. 853, 35 S. Ct. 494 (1915). Rather, it contends that the filed tariff doctrine is inapplicable here and that it need not pay AT&T the money owed for services up front where it disputes whether the services were provided as required by the tariff.
The parties were unable, after abundant briefing, to locate any case factually on point. In support of its motion, AT&T cites ample authority relating to the filed tariff doctrine. All of these cases, however, relate to challenges made to the rates charged by the carrier.
As NOS points out, it does not dispute the rates it was charged but, rather, claims that the services provided were not those which AT&T had an obligation to perform under the tariff. The only case dealing with a party's refusal to pay a tariffed rate due to a dispute over the nature and extent of services provided, and cited by both parties, is Mocatta Metals Corp. v. ITT World Communications, Inc., 54 F.C.C.2d 104 (1976).
Mocatta involved a dispute between Mocatta and ITT over international telecommunications services to be provided by ITT pursuant to a contract governed by a filed tariff. Id. at 106-07. Following delays and problems in installation and service, Mocatta withheld payment for the services. Id. at 107. Eventually, after a temporary court ordered stay was lifted and the FCC refused a stay, ITT terminated service for nonpayment. Id. at 114-15. Mocatta brought an action against ITT alleging breach of contract, negligence, violation of section 201 of the Communications Act of 1934, rendering a bill in excess of the amount owed, and failure to comply with certain portions of the tariff.
The administrative law judge ("ALJ") began his analysis of the legal issues by noting that "a carrier's filed tariff is controlling on the rights and obligations of the customer and the carrier." Id. at 115. In light of this, he characterized the issues before him:
With reference to this proceeding, the basic issue pervading all of the specified issues in this controversy between the complainant, Mocatta, as customer, and the defendant, ITT, as common carrier, involves a determination of whether the services contracted for under a filed tariff were in fact provided. ITT's filed Tariff No. 43 concerns the provision of socalled Private Line Overseas Channel Service encompassing "requisite channel facilities for direct transmission of record communication or of alternate record and voice communication between terminals as specified . . ." If the service provided by ITT to Mocatta was in accordance with the filed tariff the complaint must fail.
Id. Addressing a dispute between the parties as to the terms of the contract, the ALJ recognized that to the extent the contract purported to provide for services beyond that which was authorized by the tariff, the tariff would be overriding and controlling. Id. at 116.
It is important to note that at the time the ALJ's decision was issued, Mocatta had not yet paid ITT for the services rendered. Mocatta had instituted an action in federal district court prior to commencing its action before the FCC; ITT had filed a counterclaim seeking payment for the services rendered. Id. at 105. Prior to permitting Mocatta to proceed on the merits of its claims, the Commission required it to choose the forum in which it wished to pursue its claims. Id. Mocatta chose to proceed before the FCC and dismissed its claims in federal court; ITT's counterclaim for payment was stayed by the federal court pending a disposition by the Commission on Mocatta's claims. Id. Thus, Mocatta's claims that the services it received were not in accordance with the tariff were permitted to proceed to the merits, including "extensive prehearing discovery procedures," id., while the payments due ITT under the tariff, the subject of the counterclaim in federal court, remained unpaid. While the issue of whether a party claiming that the services it received were not in accordance with the tariff under which they were ostensibly provided was not specifically at issue in Mocatta, that case nevertheless establishes that, at least in that instance, payment under the tariff was not absolutely required during the pendency of the litigation over the quality of service. To this extent, Mocatta must be viewed as supporting NOS' position.
AT&T also argues that a decision already issued by the FCC in this dispute forecloses NOS' "self-help" remedy. The Commission had before it in In the matter of NOS Communications, Inc. v. American Telephone and Telegraph Co., No. DA 92-1594 (F.C.C. December 2, 1992) NOS' request for a temporary stay of the FCC policy which would otherwise have permitted AT&T to terminate service for nonpayment of charges. AT&T Rule 12G Statement, Exh. G. The issue in that proceeding, i.e. termination of services, is different from that presented here, i.e. whether charges must be paid prior to resolution of a customer's dispute over the nature of the services provided. While the Commission expressed its disapproval of self-help, it did not do so categorically:
The Commission previously has stated that a customer, even a competitor, is not entitled to the self-help measure of withholding payment for tariffed services duly performed but should first pay, under protest, the amount allegedly due and then seek redress if such amount was not proper under the carrier's applicable tariffed charges and regulations.