Verizon Maryland, Incorporated v. Core Communications, Inc. , 405 F. App'x 706 ( 2010 )


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  •                                UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 09-1839
    VERIZON MARYLAND, INCORPORATED,
    Plaintiff - Appellee,
    v.
    CORE COMMUNICATIONS, INCORPORATED,
    Defendant – Appellant,
    and
    MARYLAND PUBLIC SERVICE COMMISSION; STEVEN B. LARSEN, In
    His Official Capacity as Chairman of the Maryland Public
    Service Commission; HAROLD D. WILLIAMS, In His Official
    Capacity as Commissioner of the Maryland Public Service
    Commission; ALLEN M. FREIFELD, In His Official Capacity as
    Commissioner of the Maryland Public Service Commission;
    SUSANNE BROGAN, In Her Official Capacity as Commissioner of
    the Maryland Public Service Commission; LAWRENCE BRENNER,
    In His Official Capacity as Commissioner of the Maryland
    Public Service Commission,
    Defendants.
    Appeal from the United States District Court for the District of
    Maryland, at Baltimore.     J. Frederick Motz, District Judge.
    (1:08-cv-00503-JFM)
    Argued:   September 22, 2010              Decided:   December 16, 2010
    Before WILKINSON, KING, and GREGORY, Circuit Judges.
    Reversed and remanded by unpublished opinion. Judge Gregory
    wrote the opinion, in which Judge Wilkinson and Judge King
    joined.
    ARGUED: Michael Brian Hazzard, ARENT FOX, LLP, Washington, D.C.,
    for Appellant.    Joseph Ruggiero, VERIZON COMMUNICATIONS INC.,
    Arlington, Virginia, for Appellee. ON BRIEF: Joseph P. Bowser,
    ARENT FOX, LLP, Washington, D.C., for Appellant.         Ann N.
    Sagerson, VERIZON, Arlington, Virginia; Scott H. Angstreich,
    KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, PLLC, Washington,
    D.C., for Appellee.
    Unpublished opinions are not binding precedent in this circuit.
    2
    GREGORY, Circuit Judge:
    The Telecommunications Act of 1996 (hereinafter “the Act”)
    was designed to enable new Local Exchange Carriers (hereinafter
    “LECs”) to enter local telephone markets with ease and to reduce
    monopoly control of these markets and increase competition among
    providers.      Verizon Communications Inc v. FCC, 
    535 U.S. 467
    , 489
    (2002); 
    47 U.S.C. §§ 251
     et seq.                     Here, we must consider two
    questions that arise from interpreting the Act and the rules
    promulgated          by     the         Federal      Communications           Commission
    (hereinafter “FCC”) including (1) what type of connectivity an
    InterConnection           Agreement       (hereinafter         “ICA”)       between      an
    existing   or    Incumbent        LEC    (hereinafter       “ILEC”)     and    a   new   or
    Competitive LEC (hereinafter “CLEC”) required and (2) whether
    the district court erred in finding that the loop connection
    requested by a CLEC was of a lesser quality than the InterOffice
    Facilities      (hereinafter       “IOF”)      interconnection        proposed      by   an
    ILEC and therefore not in compliance with the ICA.
    We find that the ILEC, Verizon Maryland, Inc. (hereinafter
    “Verizon”), violated the rules as promulgated by the FCC when it
    refused    to        provide      the     CLEC,      Core     Communications,         Inc.
    (hereinafter          “Core”),          with       the      technically        feasible,
    non-discriminatory          interconnection          that     Core    had     requested.
    Therefore,      we    reverse     the     district       court’s   grant      of   summary
    judgment and find that, as a matter of law, Verizon breached the
    3
    ICA.    The case is remanded to the district court for proceedings
    consistent with our ruling.
    I.
    This appeal arises from a decision by the district court
    overturning the Maryland Public Service Commission (hereinafter
    “the Commission”).            The district court found that Verizon did
    not violate its duty under the Act or ICA when it declined to
    provide Core with the requested interconnection.
    A. The Telecommunications Act of 1996
    Under   the    provisions     of   the      Act,   all     telecommunications
    carriers, both ILECs and CLECs, are obligated to interconnect
    their networks “directly or indirectly with the facilities and
    equipment      of    other    telecommunications          carriers.”        
    47 U.S.C. § 251
    (a).      In other words, the Act creates a framework for the
    development of facilities-based competition in which ILECs are
    required to interconnect their networks with the networks of
    requesting CLECs.            This interconnection ensures that consumers
    of local telephone service may communicate with consumers who
    are served by a different LEC.                  The Act also imposes a specific
    interconnection        duty    on   ILECs.        ILECs    must    permit    CLECs   to
    interconnect        directly   to   their       network   as    long   as   they   meet
    certain requirements.          
    47 U.S.C. § 251
    (c)(2).
    4
    B. The Interconnection Agreement
    In 1999, Core was beginning to enter the local Baltimore
    telephone market.      By statute, Core was entitled to connectivity
    with the existing incumbent network that was (1) “technically
    feasible”; (2) at least equal in quality to that provided by the
    ILEC to “itself or to any subsidiary, affiliate, or any other
    party to which the carrier provides interconnection;” and (3)
    “on rates, terms, and conditions that are just, reasonable, and
    nondiscriminatory.”      
    47 U.S.C. § 251
    (c)(2)(B)-(D).            In order to
    expedite    negotiations,     Core   adopted     an   existing    ICA    between
    Verizon, the ILEC in the region, and American Communications
    Services, Inc. 1 pursuant to 
    47 U.S.C. § 252
    (i).               The adoption of
    this agreement was approved by the Commission on September 15,
    1999.       The   agreement     stated    that     Verizon     would    provide
    interconnection    “in   accordance      with   the   performance      standards
    set forth in Section 
    47 U.S.C. § 251
     (c) of the Act and the FCC
    regulations.”     J.A. 55.
    Under 
    47 U.S.C. § 252
    (a)(1), ILECs and CLECs are free to
    negotiate    binding     ICAs   “without        regard   to”     the    baseline
    interconnection performance standards set forth in the Act and
    1
    American Communications Services, Inc. was another CLEC
    who was attempting to enter the telephone market in Baltimore.
    They had previously negotiated with Verizon to form the ICA
    which Core later adopted.
    5
    the corresponding FCC regulations.                   See 
    47 U.S.C. §§ 251
    (b)-(c);
    
    47 C.F.R. §§ 51.305
    , 51.311, 51.313; Verizon Md., Inc. v. Global
    NAPS,    Inc.,       
    377 F.3d 355
    ,    390     (4th     Cir.       2004).    In    such
    circumstances,        the    generally        applicable     performance        standards
    will     only    apply      to    the   extent      that    the       parties   have    not
    contracted around them.
    All ICAs must be presented to the Commission for approval
    even when they have been negotiated by the parties.                             
    47 U.S.C. § 252
    (e)(1)-(2).            Commissions have also been vested with the
    authority       to   implement      and    enforce     these          agreements.      Core
    Commc’n Inc. v. Verizon Pa., Inc., 
    493 F. 3d 333
    , 335 (3d Cir.
    2007).     According to the Commission, delays in interconnection
    are very costly to a new provider because it “cannot operate and
    earn revenue while it continues to incur expenses.”                             J.A. 276-
    77.     Delays can benefit the ILEC by reducing the chances that
    the CLEC is successful.
    In the summer of 1999, Core initiated contact with Verizon
    regarding interconnection.              On July 27, 1999, Core sent a letter
    to Verizon requesting an activation date of September 10, 1999.
    Core calculated this date based on section 4.4.4 of the ICA,
    which states that interconnection will not occur earlier than
    forty-five       days       after       the       receipt        of     a   request     for
    interconnection by Core.                Also, as required by the ICA, Core
    provided        Verizon          with     forecasts         of        Core’s    technical
    6
    requirements.         The letter stated, “[p]lease confirm in writing
    if the requested interconnection activation date is acceptable,
    or, if it is not acceptable, please propose an alternate date,
    together       with    an   explanation            why     such    alternate      date    is
    appropriate.”         J.A. 132-33.       Verizon did not respond in writing.
    At a meeting on August 11, 1999, the parties agreed to use
    the “entrance facility” method of interconnection.                                J.A. 88.
    Entrance facilities are dedicated transmission facilities that
    connect ILEC and CLEC locations.                     Verizon describes four major
    steps for provisioning initial interconnection with Core using
    the entrance facility method:                      (1) constructing the physical
    interoffice facility between Verizon’s and Core’s networks; (2)
    provisioning transport circuits from Verizon’s to Core’s Wire
    Center; (3) provisioning transport circuit; and (4) establishing
    interconnection         trunks     between         Verizon’s        switch    and   Core’s
    switch.
    Core    requested       interconnection            with    Verizon    at   its    Wire
    Center    on    the    tenth     floor    of       the    Court    Square     building    in
    Baltimore, Maryland.             That floor of the building was “on-net”
    with    Verizon,       meaning    that     it       was    physically        connected    to
    Verizon’s central network through fiber feeder cables and an
    OC-12 multiplexer (hereinafter “OC-12 MUX”).                         Verizon had turned
    on an OC-12 Loop Ring at the building in June 1999, meaning that
    physical      construction       was   complete,          the     optical    signals     were
    7
    transmitting, and the ring was service-ready.                           At some point,
    however,      the    OC-12    Mux     was   disconnected        from    the    OC-12     Loop
    Ring.
    Verizon claims that on August 11, 1999, it estimated that
    connection would take between four to six months.                            In an effort
    to    speed    things      along,   Core     asked      that    Verizon      expedite     the
    interconnection process by using the existing OC-12 Loop Ring
    and OC-12 Mux for interconnection, as this would eliminate the
    need for Verizon to build new facilities.                       It also requested an
    interconnection activation date of September 18, 1999.                                Verizon
    agreed       that    using    the     existing         OC-12    Loop    Ring     would    be
    technically feasible, but would not commit to Core’s proposal at
    the     August      11    meeting     until       it    first    checked       with    other
    departments.         The record indicates that the OC-12 Loop Ring had
    the capacity sufficient to support Core’s initial request.
    On August 15, 1999, Verizon informed Core that the OC-12
    Mux    had    been       “assigned”    to    some       “customer      of   record,”     the
    identity      of    whom    Verizon    would      not    disclose.          Thus,     Verizon
    claimed that the OC-12 Mux was unavailable for interconnection.
    Later, Verizon admitted that Core was the customer of record for
    the OC-12 Mux.            However, Verizon claims that Core was assigned
    to the OC-12 Mux in a retail capacity as a “customer” rather
    than as a “carrier.”
    8
    On August 31, 1999, Verizon informed Core that, as a matter
    of   policy,        it     would     not       use        the     OC-12       Loop     Ring         for
    interconnection,           whether       or    not    it    was    technically          feasible.
    Verizon     further       explained       on    September         7,     1999,       that    it     had
    previously classified the existing OC-12 Mux as a “customer”
    facility, rather than a “carrier” facility and that the OC-12
    Mux would need to be “reinventoried” as a “carrier” facility in
    order    to   use    it     for    interconnection.                Instead       of    using        the
    existing      facilities,          Verizon      stated          that     it    would        need    to
    physically      detach       the    OC-12       Mux       from    the     OC-12       Loop     Ring,
    construct a new OC-12 ring interoffice facility ring (“New OC-12
    IOF Ring”), and insert the multiplexer into the new ring before
    subsequent      steps       in     the    interconnection              process        could        take
    place.
    Core     met    with       Verizon       again       on    September       9,     1999,        to
    express       its    desire         to        use     the        OC-12        Loop     Ring         for
    interconnection.           As a result of the meeting, Verizon informed
    Core that it would complete construction of the New OC-12 IOF
    Ring and establish connection to the Wire Center by November 16,
    1999.     Core responded on September 24, 1999, that the November
    16   date     was    not    acceptable,             and    that    Verizon       had        not     yet
    articulated a reasonable justification for refusing to use the
    existing OC-12 Loop Ring for interconnection.
    9
    The       new    OC-12    IOF    Ring     was    completed         sometime     between
    November 16, 1999 and November 30, 1999.                           Once the new OC-12 IOF
    Ring       was    “turned    up,”       the    parties       were    able    to     coordinate
    subsequent steps in the interconnection process by December 23,
    1999, just over four months after the initial meeting between
    Core and Verizon.
    C. The Maryland Public Service Commission
    On        October    9,   1999,        Core   filed     a     complaint       with     the
    Commission         alleging      that    Verizon       was    unlawfully          “refusing    to
    provide interconnectedness” and demanding that Verizon connect
    immediately.            Core amended its complaint on January 18, 2001,
    alleging         that    Verizon       (1)    breached       the    ICA     “by    failing     to
    provide      interconnection           within     the    requested        45-day     interval,
    and by refusing to negotiate an alternative interval,” J.A. 296;
    (2) breached its agreement by not providing Core with the same
    terms it provides to others, J.A. 298 2; (3) refused to provide
    interconnection “at a technically feasible point”, J.A. 302; (4)
    “impos[ed] unjust and unreasonable terms and conditions on the
    interconnection process” J.A. 304; and (5) “breached its duty of
    good faith and fair dealing under the Interconnection Agreement
    2
    At oral argument, counsel for Core represented that loop
    connection   is  used   in  ten   percent   of these  types  of
    interconnections between Verizon and CLECs.
    10
    with    Core       by    refusing    to     provide       interconnection            within      a
    commercially reasonable time.”                     J.A. 305.       On March 25, 2002,
    count one was dismissed by the Commission and is not at issue in
    this matter.
    On August 8, 2003, the hearing examiner, assigned by the
    Commission, entered a proposed order finding that Verizon had
    breached section 27.1 of the ICA and a duty of fair dealing and
    good faith under Maryland contract law.                           The hearing examiner
    made     a     factual       finding        that     “Verizon         did     not     provide
    interconnection to Core in as timely a fashion as it reasonably
    would       have        provided    interconnection          to       any     of     its       own
    customers.”         J.A. 116.        Specifically, the Commission found that
    “it is undisputed that capacity was available and connection
    technically feasible” and that Verizon denied access to this
    connection in bad faith.             J.A. 124.
    On    February        26,    2004,    the     Commission        issued        an    order
    affirming the proposed order of the hearing examiner.                                 On July
    9,     2004,    the       Commission       denied     a    motion       by    Verizon          for
    reconsideration.
    On    February       25,    2008,    Verizon       filed   a    complaint          in   the
    District Court of Maryland seeking review of the Commission’s
    finding.           On     March    30,     2009,    the     district         court        granted
    Verizon’s motion for summary judgment thereby overturning the
    decisions of the Commission.                 The district court concluded that
    11
    Verizon       had        no     duty        to     provide       the     lesser        quality
    interconnection requested by Core since the ICA required Verizon
    to provide Core with a connection of equal quality to that which
    it    provides      “itself      or    to    any      subsidiary,      affiliate,       or    any
    other party to which the carrier provides interconnection.”
    The   district        court     found      as    a   factual     matter       that    the
    interconnection requested by Core was of lesser quality than the
    connectivity Verizon provided between carrier switching offices.
    Furthermore,        the       district      court       concluded      that    in     order   to
    determine Verizon’s obligation pursuant to the ICA, one measures
    the     quality     of     connection        it       provides    between       the    carrier
    switching-offices, not between a carrier switching-office and an
    end-user.      Thus, the district court held that Verizon would have
    been in violation of the ICA if it provided the interconnection
    requested by Core since it was not of equal quality to that
    provided      between          carrier       switching-offices,               which    Verizon
    asserts would have effectively modified the ICA. 3                              The district
    court      also     vacated       the       Commission’s         finding       that    Verizon
    breached its duty of good faith and fair dealing.
    3
    It is worth noting that the record does not reflect that
    Verizon raised any concern about whether the loop connection
    quality would be in violation of the ICA until the litigation
    had commenced.
    12
    II.
    We review de novo the district court’s grant of summary
    judgment.     See Garofolo v. Donald B. Heslep Assocs., Inc., 
    405 F.3d 194
    , 198 (4th Cir. 2005).                      Absent a statutory command,
    general standards for judicial review of agency action apply.                                 A
    “state     agency’s     interpretation             of        federal    statutes      is    not
    entitled      to    the     deference          afforded          a      federal       agency’s
    interpretation of its own statutes. . .”                             GTE South, Inc. v.
    Morrison,     
    199 F.3d 733
    ,       745    (4th       Cir.     Va.    1999)     (citation
    omitted).           Thus,    we       review        de        novo      the    Commission’s
    interpretation of the Act.               Nonetheless, “an order of a state
    commission    may     deserve     a    measure          of    respect    in    view    of   the
    commission’s experience, expertise, and the role that Congress
    has   given    it     in    the       Telecommunications               Act.”       BellSouth
    Telecomms., Inc. v. Sanford, 
    494 F.3d 439
    , 447 (4th Cir. 2007).
    Turning to the standard for our review of the Commission’s
    fact-finding, we note first that the Act does not require us to
    sit as a “super” public utilities commission.                            Morrison at 745.
    Therefore, we review the fact finding of the state agency under
    the substantial evidence standard.                           Morrison at 745 (citation
    omitted).      In     applying     the       substantial         evidence      standard,      a
    “court is not free to substitute its judgment for the agency
    . . . it must uphold a decision that has ‘substantial support in
    the record as a whole’ even if it might have decided differently
    13
    as an original matter.”             AT&T Wireless PCS, Inc. v. City Council
    of City of Virginia Beach, 
    155 F.3d 423
    , 430 (4th Cir. 1998).
    There is no meaningful difference between the “arbitrary and
    capricious”        standard       and    substantial         evidence    standard      with
    respect to fact finding.                Morrison at 745 n.5.
    III.
    The    Act    of     1996    was     designed     to     enable    new     telephone
    companies to enter into local markets with ease and to reduce
    monopoly control.           Verizon Communications Inc v. FCC, 
    535 U.S. 467
    , 489 (2002); 
    47 U.S.C. §§ 251
     et seq.                      The Supreme Court has
    provided the Circuit Courts with guidance about the purpose of
    the   Act:         “The    1996     Act       both    prohibits       state    and     local
    regulation    that        impedes       the   provision       of   ‘telecommunications
    service,’ § 253(a), and obligates incumbent carriers to allow
    competitors to enter their local markets, 
    47 U.S.C. § 251
    (c).”
    Verizon at 492.           Additionally, the Act is designed to “address[]
    the practical difficulties of fostering local competition.”                             
    Id.
    Core   argues        that    the     district     court’s       order    should    be
    overturned for several reasons.                      First, Core asserts that the
    district     court        erred     when      it     found     that     the    Commission
    misconstrued       federal        law    by    requiring       that    Verizon       provide
    interconnection over loop facilities.                    Instead Core argues that
    once a CLEC has requested a form of interconnection that is
    14
    available at any technically feasible point within the ILEC’s
    network, then the ILEC must provide that form of interconnection
    on a non-discriminatory basis.                       Second, Core argues that the
    district court had no factual basis upon which to find that the
    requested    interconnection             was    of    lesser        quality.      Furthermore,
    Core   maintains         that   if       it    requested        a    specific        method    of
    interconnection, then the court is in no position to dictate
    which kind of interconnection satisfies Core’s needs.                                   Lastly,
    Core contends that the court erred in finding that Verizon had
    not breached its duty of good faith and fair dealing.
    Verizon      argues      that          the     Commission’s           opinion     lacked
    foundation       since    it    found         that        Verizon    had     an   affirmative
    obligation    to     offer      to   amend          the    contract     to    authorize       the
    manner of interconnection Core sought.                          In effect, this would
    require Verizon to alter its contract.                               Furthermore, Verizon
    argues that any amendment to the ICA must be in writing pursuant
    to provisions contained in the ICA.                         Therefore, Verizon reasons
    that it only had an obligation to provide the same method of
    interconnection it provides other CLECs and that the ICA could
    not be modified without written notice signed by all parties.
    In   order    to    make      a    determination             about     what     type    of
    interconnection Verizon had a duty to provide to Core, it is
    necessary to examine the contract between the parties:                                 the ICA.
    The ICA provides that the ILEC will provide interconnection
    15
    in accordance with the performance standards set forth
    in Section 251(c) of the Act and the FCC Regulations,
    in particular the rules set forth in 47 Code of
    Federal   regulations    §§ 51.305(a)(3)  to   (a)(5),
    51.311(A) to (c), and 51.313(b).
    ICA,    J.A.    57.      The     Act    requires        that    interconnection     of
    facilities       and    equipment       be    provided     for    “any    requesting
    telecommunications           carrier”        so   long     as    it    meets     three
    requirements.          
    47 U.S.C. § 251
    (c).              It must be (1) “at any
    technically feasible point within the carrier’s network,” (2) at
    least equal in quality to that provided by the ILEC to itself or
    to any subsidiary, affiliate, or any other party to which the
    carrier provides interconnection, and (3) “on rates, terms, and
    conditions      that   are    just,    reasonable,       and    nondiscriminatory.”
    
    47 U.S.C. § 251
    (c).          The first and third requirements are not in
    dispute.       Thus, this Court’s decision turns on interpreting what
    the Act meant when it prescribed interconnections between ILECs
    and CLECs “at least equal in quality” to the interconnection
    provided by an ILEC to “any subsidiary, affiliate, or any other
    party.”     
    47 U.S.C. § 251
    (c).
    The FCC rules, as adopted by the ICA, are instructive in
    determining      whether      interconnection       through       a   loop    facility
    satisfied the ICA.           The rules promulgated by the FCC provide, in
    pertinent       parts,       that     Verizon      is     required       to    provide
    interconnection at “a level of quality that is equal to that
    16
    which the ILEC provides itself, a subsidiary, an affiliate, or
    any other party.”        
    47 C.F.R. § 51.305
    (a)(3).                    Furthermore,
    [t]his obligation is not limited to a consideration of
    service quality as perceived by end users, and
    includes, but is not limited to, service quality as
    perceived   by   the   requesting   telecommunications
    carrier.
    
    Id.
        (emphasis      added).           These        rules      reflect          a    clear    and
    unequivocal     intention         that       the     requesting        telecommunications
    carrier is to play a significant role in determining the type
    and quality of interconnection it received from the ILEC.                                      The
    Commission,        which         is     responsible             for        overseeing         the
    implementation      of     the    Act    throughout          the      state      of    Maryland,
    agrees with this interpretation.
    Furthermore,        Verizon           had      provided             this        kind    of
    interconnection in the past.                   The Commission’s finding is that
    Verizon has provided interconnection to other CLECs, and even
    Core, over high-capacity loop facilities just like the existing
    OC-12 Loop Ring and OC-12 Mux.                     The hearing examiner found that
    “despite having interconnected with Core over the common loop in
    other locations, in Baltimore Verizon resisted Core’s requests
    on    the   grounds    that      the     parties’         ICA   did        not       permit   loop
    interconnection.”           J.A.        114.         He    went       on    to       state    that
    “Verizon’s ability to interconnect with Core via the common loop
    outside     Maryland,      e.g.,        in     New    Jersey,         Pennsylvania,           West
    Virginia, Illinois and Massachusetts, is clear indication that
    17
    such connection should be possible in Maryland.”                         
    Id.
            Thus,
    Core’s request to interconnection through the OC-12 Loop Ring
    was not out of the ordinary.
    Moreover,       the    record    contains        the     declaration     of    Todd
    Lesser, President of North Country Communications, also a CLEC.
    Lesser states that Verizon agreed to provide interconnection to
    North Country Communications in Charleston, West Virginia over a
    shared    retail     ring    in   July    2001      until     Verizon    completed      a
    dedicated ring.       The retail ring is the equivalent to the OC-12
    Loop Ring proposed by Core here.                     Even though this incident
    occurred after the initial dispute between Core and Verizon, it
    demonstrates       that     Verizon      has       provided     other    CLECs      with
    interconnection through loop facilities, at least on a temporary
    basis.     Clearly,        Verizon   could     have      provided     interconnection
    with Core through the OC-12 Loop Ring.
    If    Verizon    had    negotiated        a   separate     ICA   with    Core,    it
    might find itself in a more favorable litigating position.                            Its
    problem, however, is that it did not do so.                       At no point does
    the ICA explicitly foreclose the use of loop interconnection or
    override the baseline performance standards governing ICAs.                            To
    the contrary, Section 27.1 of the ICA quite plainly states that
    Verizon “shall provide the Interconnection and unbundled Network
    Elements     contemplated         hereunder         in      accordance       with     the
    performance standards set forth in Section 251(c) of the Act and
    18
    the FCC Regulations.”            Or, as the district court put it, “the
    ICA between Verizon and Core expressly incorporates the statute
    and regulations.”           Verizon Md. Inc. v. Core Commc’ns, 
    631 F. Supp. 2d 690
    , 699-700 (D. Md. 2009). 4
    These      performance      standards,     by    design,    favor   Core,    not
    Verizon.     See AT&T Corp. v. Iowa Utils. Bd., 
    525 U.S. 366
    , 371
    (1999) (“The Telecommunications Act of 1996 . . . fundamentally
    restructures local telephone markets. . . . [I]ncumbent LECs are
    subject    to    a   host   of    duties    intended     to     facilitate   market
    entry.”).        For   example,     Verizon     argues    that     the   “equal   in
    quality” requirement set forth in 
    47 U.S.C. § 251
    (c)(2) did not
    compel Verizon to use loop facilities when interconnecting with
    Core.     But the FCC’s order implementing 
    47 U.S.C. § 251
    (c)(2)
    makes clear that the statute requires Verizon to provide loop
    interconnection if Core requests it:                 “[T]o the extent a carrier
    4
    Verizon argues that Section 27.1 does not incorporate all
    of the performance standards set forth in the statute and
    regulations because it states that Verizon “shall be deemed to
    meet such performance standards” if it complies with certain
    time intervals for installation and repairs. In Verizon’s view,
    those time intervals are the only “performance standards”
    contemplated by the contract.    Verizon is incorrect.   However,
    the contract makes clear that the term “performance standards”
    refers to the requirements of § 251 and the corresponding
    regulations.   See Core Commc’ns, 
    631 F. Supp. 2d at 699-700
    .
    And while the parties determined that compliance with the time
    intervals would obviate the need to comply with the statute and
    regulations, they just as clearly agreed that the statute and
    regulations would apply in the absence of such compliance.
    19
    requests interconnection of superior or lesser quality than an
    incumbent LEC currently provides, the incumbent LEC is obligated
    to    provide      the     requested    interconnection        arrangement     if
    technically      feasible.”        In   re    Implementation      of   the   Local
    Competition Provisions in the Telecommunications Act of 1996, 11
    FCC Rcd. 15,499, 15,615 (1996) (emphasis added).                  While Verizon
    did   not   need    to    contractually      bind   itself   to    the   baseline
    interconnection performance standards, it elected to do so and
    must live with the results.
    Therefore, we find that Verizon had a duty to provide Core
    with the requested interconnection and therefore breached its
    contract.       The district court’s grant of summary judgment is
    reversed and this matter is remanded for further proceedings
    consistent      with     this   decision     including   a   determination     of
    damages.
    Additionally, this Court notes that the district court’s
    finding that the loop facility was lesser in quality to the
    other potential methods of interconnection (like IOF) was not
    based on evidence in the record.              In its opinion, the district
    court notes that
    Core asserts that Verizon has not established that it
    provides a lesser quality of service to its retail
    customers . . . No factual findings were made before
    the Commission on this issue.    I note that a letter
    was written by [the Commission] in another proceeding
    accepts Verizon’s assertion that loop facilities are
    of lesser quality than IOF facilities.
    20
    J.A. 380 n. 5.         We find that this is not sufficient evidence
    upon which to base a finding that the loop connection was of a
    lesser quality than the IOFs.           The record reveals that this fact
    was disputed.        Therefore we find that, construing all facts in
    favor    of   the    non-moving   party,     the    district    court   erred   in
    finding that the loop connection was of lesser quality than the
    other connection proposed by Verizon.
    Finally, since we find that Verizon breached its contract,
    we   remand    the   question     of   whether     Verizon    also   breached   an
    implied duty of good faith and fair dealing to the district
    court for further consideration.
    For the reasons explained above, we
    REVERSE AND REMAND.
    21