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NORTH COUNTY COMMUNICATIONS v. VERIZON NEW YORK

November 14, 2002

NORTH COUNTY COMMUNICATIONS CORPORATION, PLAINTIFF,
V.
VERIZON NEW YORK, INC.; VERIZON SERVICES CORPORATION; AND DOES 1 THROUGH 100, DEFENDANTS.



The opinion of the court was delivered by: David N. Hurd, United States District Judge

MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

Plaintiff, North County Communications Corporation ("North County"), brought suit in New York State court against Verizon New York, Inc. ("VNY" or "Verizon"), Verizon Services Corporation ("Verizon"), and Does 1 through 100. After Verizon filed a notice to remove the action to federal district court, North County moved to remand it back to state court. The parties have fully briefed the issues. Oral argument was held on October 11, 2002, in Utica, New York. Decision was reserved.

II. FACTUAL BACKGROUND

Taken from plaintiff's complaint, the following are the alleged facts. The Telecommunications Act of 1996 expanded competitive possibilities in local exchange markets by essentially allowing smaller telephone companies to more easily "interconnect" their networks with those of larger, more established companies. These smaller companies are known, under the Telecommunications Act and elsewhere, as competitive local exchange carriers ("CLECs"), and the larger companies are known as incumbent local exchange carriers ("ILECs").

On March 14, 2001, North County, as a CLEC, notified Verizon of its intent to interconnect with Verizon networks in New York State. VNY is an ILEC. North County claims that in the six months following, Verizon "deliberately dragged [its] feet and put up obstacles and roadblocks to keep [North County] out of the local telecommunications market in New York, all for the purpose of maintaining [VNY's] grip on the local telephone market, depriving consumers of maximum choice with their telecommunications dollar and damaging [North County] in the process." (Complaint, ¶ 6). North County claims that the Verizon account manager assigned to service North County's needs, Dianne McKernan, "stonewall[ed] the interconnection process by making unreasonable, onerous and unnecessary demands upon [North County." (Complaint, ¶ 17).

Among the demands made on North County was the alleged interconnection prerequisite that a "dedicated" facility be built. VNY, as an ILEC, controls facilities throughout the New York telecommunications market. The funding necessary to build these facilities was provided, at least in part, by VNY's ratepayers and those of its predecessors, New York Telephone and Bell Atlantic. Unable to procure the necessary funding for construction of new facilities, North County requested interconnection at two separate Verizon facilities in New York. Plaintiff claims that Verizon refused the request, despite the technical capabilities to grant it, and despite the fact that Verizon had allowed other affiliates or parties to share the facilities. Plaintiff claims that Verizon instead demanded that North County build a new "dedicated facility" before interconnection could occur, and refused to hold meetings with North County until the construction of such facility was complete.

North County also lists other conduct to support its belief that Verizon was behaving in a manner consistent with maintaining monopolistic power over the New York City telecommunications market. Specifically, North County claims Verizon:

(1) repeatedly lost orders and signature pages;
(2) ignored [North County's] request to opt into an existing interconnections [sic] agreement between [VNY] and another CLEC, as was North County's right;
(3) insisted on installing equipment on unnecessary additional racks at the location where [North County] was subleasing space, despite the absence of any technical reason to impose such a requirement, and needlessly raising the cost of doing business for [North County];
(4) refused to allow [North County] to order interconnection trunks, thus preventing [North County] from being able to order prefixes;
(5) refused to build trunks in as timely a fashion as with other service offerings, and as if [North County] were a retail customer;
(6) demanded that [North County] provide the defendants with information which [North County] was unable to provide because the information resided in the defendants' sole possession, and then delayed the interconnection process further when ...

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