ired Level 3 Communications, Inc.
(Level 3) to permit direct interconnection with Neutral Tandem, Inc. (Neutral Tandem) to
permit direct interconnection with Neutral Tandem at a technically feasible location provided
Neutral Tandem pays all of the reasonable costs associated with said direct interconnection.
(Order, p. 12)


On September 6, 2007, Level 3 petitioned the Commission for rehearing, reconsideration
and oral argument. Neutral Tandem filed a Brief in Opposition to Petition for Rehearing and
Reconsideration on September 24, 2007. On October 19, 2007, Level 3 filed a Supplement to its
Petition.

Discussion

Level 3 raised a number of arguments on reconsideration. Level 3s arguments, Neutral
Tandems response and Staffs recommendation on each issue are set forth below. Staff
recommends that the Commission deny Level 3s Petition.


1.
Level 3 argues that new evidence undermines Neutral Tandems credibility.

Level 3 states that Neutral Tandem withdrew its complaint against Level 3 in Indiana. Level 3
also argues that Neutral Tandem has stated that it is no longer terminating traffic from its carrier
customers to Level 3 in Indiana, New Jersey, Maryland, Wisconsin and Ohio. Although Neutral
Tandem testified in Georgia that the re-routing of traffic would take six months, it actually has
been accomplished in a matter of weeks.

Neutral Tandem Response

Neutral Tandem did not have any choice but to disconnect from Level 3 in certain states where it
sends only small amounts of traffic to Level 3 because Neutral Tandem could not fight Level 3
in every state.


Staff Recommendation

What Neutral Tandem has done in other states may impact how the facts are weighed, but
doesnt bind the Commission. In this instance, Neutral Tandems explanation for its actions
appears reasonable. Staff does not recommend that the Commission grant reconsideration
on this ground.

2.
Level 3 argues that the Order mistakes the nature of the contracts between Level 3 and
Neutral Tandem.

Level 3 states that Neutral Tandem did not introduce the contracts into the record, and that the
contracts did not cover Georgia. In addition, the all of the contracts provided for the termination
of service within 30 days. Finally, Level 3 states that the Commission Order does not mention
these material facts.

Neutral Tandems Response

It is not a contract law case. Level 3s termination of the contract does not impact its obligations
to receive transited traffic on nondiscriminatory terms and conditions.

Staff Recommendation

The Commission Order was based on the State Telecom Act. Regardless of whether the contract
provided for termination, Level 3 continued to have an obligation to provide reasonable
interconnection. In addition, the prohibition set forth in O.C.G.A. § 46-5-164(b) against
unreasonable discrimination still applied to Level 3, regardless of the terms of the contract. Staff
does not recommend reconsideration based on this argument.

3.
Level 3 states that the Order does not address mixed jurisdictional nature of the traffic.

Level 3 states that more than sixty percent of Neutral Tandems traffic comes from wireless
carriers, and a substantial portion of the traffic sent by Neutral Tandem to Level 3 is destined for
internet service providers. Both forms of this traffic are interstate in nature. Because the traffic is
jurisdictionally mixed, the traffic must be treated as interstate in its entirety and federal law must
prevail.

Neutral Tandems response

Neutral Tandems response to this argument is part of its conflict preemption response. Neutral
Tandem says that no other state has found that states are preempted from requiring direct
interconnection. Neutral Tandem also states that conflict preemption would require proving that
the Commissions decision directly imposes an obligation that contravenes, and cannot lawfully
be complied with under federal law. Merely stating that direct interconnection is not required
under section 251(a) of all telecommunications carriers does not make this showing because the
Commission has not required all carriers to provide direct interconnection to all other carriers.

Staff Recommendation

The Staff does not recommend reconsideration on this issue. Its analyses are set forth in
Section 5.


4.
Level 3 argues that Neutral Tandem has Voice over Internet Protocol (VoIP)
customers.
Level 3 states that Neutral Tandems VoIP customers are treated as end user customers, in which
case Neutral Tandem is the originating carrier and owes reciprocal compensation to Level 3 for
these calls.

Neutral Tandems Response

Neutral Tandem has made clear in several states that it does not send any traffic from its
enterprise VoIP customers to Level 3. Even if it Neutral Tandem had VoIP customers, the
remedy would be for Level 3 to seek compensation from the originating carrier.

Conclusion

The Commission Order does not excuse Neutral Tandem from any reciprocal compensation
obligations in those instances where it has been demonstrated that it is the originating carrier.
Staff does not believe that modification to the Commissions prior order is necessary based
on this issue.

5.
Level 3 argues that the Orders characterization of forced interconnection is inconsistent
with federal law.

Level 3 cites to the FCCs Local Competition Order for the position that indirect interconnection
satisfies a telecommunications carriers duty to interconnect and that direct interconnection is not
required under section 251(a) of all telecommunications carriers. An order requiring direct
interconnection is in conflict with federal law and invalid.

Neutral Tandems Response

Neutral Tandems response was discussed above in the context of the jurisdictionally mixed
traffic.

Staff Recommendation

This section covers both Level 3s argument concerning jurisdictionally mixed traffic and the
argument that the Commission has misconstrued Section 251(a) of the Federal Telecom Act.
These arguments can be addressed together because they both concern the central question of
whether requiring Level 3 to interconnect directly with Neutral Tandem would be preempted by
federal law.

The Vonage decision cited by Level 3, which found that federal law applies to jurisdictionally
mixed traffic when it is not feasible to separate out the intrastate traffic, preempted the state
action in question because it determined that the state requirement negated federal policies and
rules. Therefore, the question is whether requiring Level 3 to directly interconnect with Neutral
Tandem subject to the condition that Neutral Tandem pays all of the reasonable costs of
interconnection would negate any federal policy.

Conflict preemption occurs where it is impossible for a private party to comply with both state
and federal requirements, or where state law stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress." Sprietsma v. Mercury Marine, 537 U.S. 51, 65 (2002). Interconnecting directly with Neutral Tandem would be in compliance with
Level 3s obligation under Section 251(a); therefore it is not impossible for Level 3 to comply
with both the state and the federal regulation.

The question is whether a state requirement that Level 3 interconnect directly with Neutral
Tandem would stand as an obstacle to the accomplishment and execution of the full purposes
and objectives of Congress. The FCCs Local Competition Order states that
telecommunications carriers should be permitted to provide interconnection pursuant to section
251(a) either directly or indirectly, based upon their most efficient technical and economic
choices. (¶ 997). This paragraph goes on to state that indirect connection . . . satisfies a
telecommunications carriers duty to interconnect pursuant to section 251(a). Id. Finally, the
paragraph concludes by stating that direct interconnection . . . is not required under section
251(a) of all telecommunications carriers. Id.

The Commission order required Level 3 to interconnect directly with Neutral Tandem. The
Commission did so pursuant to O.C.G.A. § 46-5-164(a) that requires local exchange carriers
permit reasonable interconnection. The statute leaves to the discretion of the Commission to
determine what constitutes reasonable interconnection in a given circumstance. Because
Neutral Tandem provides exclusively transit service, indirect interconnection would not be
adequate. Given that Neutral Tandem is required under the terms of the Commission order to pay
all of Level 3s reasonable costs of interconnection, Level 3 is not negatively impacted by the
direct interconnection. In this narrow circumstance, the Commission determined that a
requirement for direct interconnection is reasonable. The FCCs conclusion that indirect
interconnection suffices to comply with Section 251(a) does not mean that there will never be a
situation where the direct interconnection should be required to further the competitive goals of
the Federal Act.

The Commission concluded that the requiring Level 3 to interconnect directly with Neutral
Tandem is necessary to further competition. (Order Mandating Direct Interconnection, p. 5). The
Commission cited to the provisions of the Federal Act that