Enhanced Communications of Northern New England, Inc. v. Public Utilities Commission et al. — 2017 ME 178

MAINE SUPREME JUDICIAL COURT 	Reporter of Decisions
Decision: 	2017 ME 178
Docket: 	PUC-16-398
Argued: 	April 11, 2017
Decided: 	August 15, 2017
Panel: 	SAUFLEY, C.J., and MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
ENHANCED COMMUNICATIONS OF NORTHERN NEW ENGLAND, INC.
v.
PUBLIC UTILITIES COMMISSION et al.
HUMPHREY, J.
[¶1] Enhanced Communications of Northern New England, Inc., appeals
from an order of the Public Utilities Commission granting in part and denying
in part a petition for a certificate of public convenience and necessity to
operate as a competitive local exchange carrier. See 35-A M.R.S. §§ 2102, 2105
(2016). 	Enhanced contends that the Commission’s partial denial is unlawful
and unsupported by substantial evidence. We affirm the order.
I. BACKGROUND
[¶2] 	Enhanced is a Delaware corporation that sells communications
services, 	including 	long 	distance 	telephone 	and 	data 	services, 	and 	is 	a
wholly-owned direct subsidiary of FairPoint Communications, Inc. 	FairPoint
is an incumbent local exchange carrier (ILEC). 	On June 23, 2015, Enhanced

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filed a petition with the Commission pursuant to 35-A M.R.S. § 2102 to obtain
a 	certificate 	of 	public 	convenience 	and 	necessity 	to 	furnish
telecommunications service as a competitive local exchange carrier (CLEC).1
Because an application by a CLEC to operate in the same regional service
territory as an affiliated ILEC presented a novel issue, on August 13, 2015, the
Commission held an informal technical conference to gather information
about intended service plans and the relationship between Enhanced and
FairPoint.2 	Several parties and stakeholders attended the informal technical
conference, including representatives from FairPoint, the Office of the Public
Advocate (OPA), Time Warner Cable (TWC), and the CLEC Association of
Northern New England (CANNE). 	OPA, TWC, and CANNE all submitted
comments to the Commission regarding Enhanced’s petition.
1 A local exchange carrier (LEC) is “any person that is engaged in the provision of telephone
exchange service or exchange access.” 	35-A M.R.S. § 102(9-E) (2016). 	ILECs are entities (or
successors to those entities) that held regional monopolies over local telephone service prior to
deregulation, when the federal Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
(codified as amended in scattered sections of 47 U.S.C.S.), required ILECs to unbundle parts of their
telecommunications networks to allow CLECs to enter the market. 	See 35-A M.R.S. § 102(9-B)
(2016); Verizon New Eng., Inc. v. Pub. Utils. Comm’n, 2005 ME 64, ¶ 2, 875 A.2d 118. CLECs utilize
ILEC infrastructure.
A number of FairPoint subsidiaries operate in Maine as affiliated ILECs, including China
Telephone Company, Standish Telephone Company, Community Service Telephone Co., Maine
Telephone Company, Sidney Telephone Company, Northland Telephone Company of Maine, Inc.,
and Northern New England Telephone Operations, LLC.
2 FairPoint and its affiliated ILECs are, unless otherwise noted, referred to collectively in this
opinion as FairPoint.

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[¶3] 	On March 21, 2016, the Commission staff recommended that the
Commission grant Enhanced’s petition to the extent that Enhanced would be
allowed to operate as a CLEC in all Maine exchanges except for those in which
FairPoint, or an affiliate or subsidiary, already provided service as an ILEC. On
June 	20, 	2016, 	the 	Commission 	issued 	an 	order 	largely 	adopting 	the
recommended decision, granting Enhanced’s petition in part, but denying it to
the extent that Enhanced sought to provide service as a CLEC in service areas
where FairPoint, or an affiliate or subsidiary, already provided service as an
ILEC.
[¶4] 	The Commission found that Enhanced (1) satisfied the definition
of a local exchange carrier because it will provide local exchange service in
Maine, (2) possessed the financial and technical capabilities to provide local
exchange service in the state, and (3) satisfied the definition of a CLEC
because it is not an ILEC. 	The Commission noted, however, that whether the
public convenience and necessity required that Enhanced provide service as a
CLEC throughout Maine “present[ed] a complicated question” because an
entity wholly-owned by an ILEC seeking to provide service in the same service
territory as that ILEC was a matter of first impression.

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[¶5] The Commission observed that if Enhanced provided service in the
same service territories as FairPoint, it was not clear that a benefit would be
realized in the form of increased competition. 	The Commission articulated
several concerns raised by the parties, including that, because of its corporate
relationship with FairPoint, Enhanced could gain favorable access and use of
common facilities and resources, customer data, pricing, prioritization of
service calls, and other competitive advantages over other CLECs. 	The
Commission 	found, 	according 	to 	Enhanced’s 	representations 	at 	the
conference, that Enhanced’s petition to obtain CLEC authorization was not
motivated by a desire to provide new or additional service to customers—
“Enhanced identified only a single activity that its current lack of CLEC
authorization prohibits: the ability to requisition local telephone numbering
resources,” in particular “thousand-number blocks of consecutive telephone
numbers.”3 	The 	Commission 	acknowledged 	that 	“[a]ccess 	to 	numbering
resources by LECs is subject to [Federal Communication Commission] rules
and the guidelines established by 	[the North American Numbering Plan
Administrator], which are designed to preserve limited numbering resources,”
3 The Commission noted that ILECs such as FairPoint are sometimes unable to acquire large
sequential number blocks because they already have a supply of unused, nonconsecutive numbers
and Federal Communication Commission (FCC) rules limit access to additional numbers until those
numbers are sufficiently exhausted. 	Large blocks of consecutive numbers are valuable because
they are sought by business customers.

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but 	concluded, 	citing 	a 	longstanding 	Commission 	policy 	to 	use 	number
resources efficiently to preserve the single 207 area code in Maine, that it was
not in the public convenience and necessity to grant Enhanced’s petition to
operate throughout the entire state. 	The Commission therefore partially
denied the petition 	insofar as Enhanced sought to 	operate in the same
territory as FairPoint, and emphasized that the partial denial alleviated the
competition concerns raised by parties in the informal technical conference.
The Commission concluded by stating:
The Commission’s partial dismissal of Enhanced’s petition is
without prejudice to file, in a separate Docket, another petition
specifically requesting authority to operate within the service
territories of the FairPoint ILECs. 	Any such petition should
address the anti-competitive and numbering concerns raised by
the Commission and the parties to this proceeding.
[¶6] 	Enhanced filed a petition to reconsider the decision on July 11,
2016. The Commission did not act upon the petition and thus it was denied by
operation of law on August 1, 2016. 	See 9 C.M.R. 65 407 110-12 § 11(D)
(2013). 	Enhanced timely appealed. See 35-A M.R.S. § 1320 (2016); M.R.
App. P. 2.

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II. DISCUSSION
A. 	Standard of Review
[¶7] Our review of a Commission decision is deferential and limited “to
determining whether the agency’s conclusions are unreasonable, unjust, or
unlawful in light of the record.” 	Pine Tree Tel. & Tel. Co. v. Pub. Utils. Comm’n,
634 	A.2d 	1302, 	1304 	(Me. 	1993). 	“This 	court 	generally 	refuses 	to
second-guess agencies on matters within their expertise.” 	Id. 	“In reviewing
an agency’s interpretation of its own rules, regulations, or procedures, we give
considerable deference to the agency . . . .” Forest Ecology Network v. Land Use
Regulation Comm’n, 2012 ME 36, ¶ 28, 39 A.3d 74 (quotation marks omitted).
When reviewing an agency’s interpretation of its own regulation, we begin by
“determin[ing] de novo whether the [regulation] is reasonably susceptible of
different interpretations and therefore ambiguous.” See Cent. Me. Power Co. v.
Pub. Utils. Comm’n, 2014 ME 56, ¶¶ 18-19, 90 A.3d 451 (quotation marks
omitted). 	“[I]f the language is unambiguous, we interpret the [regulation]
according to its plain language.” Arsenault v. Sec’y of State, 2006 ME 111, ¶ 11,
905 A.2d 285.

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B. 	Certificate of Public Convenience and Necessity
[¶8] 	A CLEC may not provide service in a municipality where another
utility 	is 	furnishing 	or 	authorized 	to 	furnish 	service 	unless 	it 	obtains
Commission approval pursuant to 35-A M.R.S. §§ 2102 and 2105. 	Section
2105 requires that to approve an additional utility where a utility already
provides service, the Commission must make “a declaration, after public
hearing of all parties interested, that public convenience and necessity require
a 2nd public utility.” 	35-A M.R.S. § 2105(1). 	Section 4(A) of Chapter 280 of
the Commission’s regulations similarly provides for approval “by making a
declaration that the public convenience and necessity require an additional
public utility.” 9 C.M.R. 65 407 280-4 § 4(A) (2003). The regulation sets forth
three specific findings that are required before a declaration can be made. See
id.
Approval to provide any service shall not be issued unless the
applicant has presented sufficient evidence for the Commission to
make the following findings:
(1) The applicant has adequate financial ability and willingness to
cover any customer advances and deposits; and to pay intrastate
access 	charges 	and 	interconnection 	charges 	on 	all 	intrastate
telecommunications services;
(2) The applicant (other than a[n] interexchange carrier that is a
reseller or [a] local exchange carrier that provides service solely
through 	resale 	of 	local 	service 	purchased 	from 	a 	wholesale

8
schedule of another LEC) has the technical ability to measure and
record intrastate traffic information and billing amounts that may
be necessary for the calculation of access and interconnection
charges; and
(3) The applicant is willing and able to comply with State law and
Public Utilities Commission rules, including, but not limited to,
this Chapter.
Id.
[¶9] There is no dispute that Enhanced met all three criteria set forth in
section 4(A)(1)-(3)—the Commission found that Enhanced had the financial
and technical capability to provide service and did not find that Enhanced was
unwilling or unable to comply with the law. 	The central issue presented in
this appeal is whether the Commission could, after making those findings,
nonetheless deny Enhanced’s petition for a certificate of public convenience
and necessity (CPCN) to provide service in the same service territory as
FairPoint 	on public interest grounds 	because of concerns about number
resources and anti-competitive behavior.
[¶10] 	The Commission reads section 4(A) to require not only that a
utility meet the three criteria specified in that provision, but also that the
Commission 	determine 	that 	the 	petition 	is 	in 	the 	public 	necessity 	and
convenience, 	which 	the 	Commission 	interprets 	as 	the 	public 	interest.
Enhanced argues that an additional public interest requirement does not

9
appear in the statutes or regulations, and that it is beyond the Commission’s
power to impose here absent rulemaking.
[¶11] 	Although section 4(A) does not list a “public interest” or “public
benefit” factor among the three listed criteria, the unambiguous language of
the regulation provides that, before granting a CPCN, the Commission must
make a “declaration that the public convenience and necessity require an
additional 	public 	utility.” 	9 C.M.R. 	65 	407 	280-4 	§ 	4(A). 	Contrary 	to
Enhanced’s contention, the regulation does not compel the Commission to
grant the petition if only the three criteria set forth in 9 C.M.R. 65 407 280-4
§ 4(A) are met. 	Instead, the three criteria set forth in section 4(A) are
threshold or predicate considerations that are necessary, but not, standing
alone, sufficient to grant a petition. The Commission must further declare that
an additional utility is in the public interest.4 	The regulation does not, for
example, state that if the Commission makes the three enumerated findings
that it must grant the petition. 	Rather, section 4(A) permits the Commission,
after considering the evidence, to ultimately conclude that an additional utility
is not in the public interest, and to deny a petition on that basis.
4 	We construe “public convenience and necessity” as synonymous with “public benefit” or
“public interest.” See Zachs v. Dep’t of Pub. Utils., 547 N.E.2d 28, 32 (Mass. 1989) (“[T]he phrase
‘public convenience and necessity’ is a term of art that stands for the general notion of ‘public
interest.’ Other courts have agreed that the phrase is simply a conclusory symbol for public benefit,
good, or interest.” (citations omitted) (quotation marks omitted)); see also In re Chapman, 151 Me.
68, 71, 116 A.2d 130, 132 (1955).

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[¶12] Construing the plain language of 9 C.M.R. 65 407 280-4 § 4(A), we
conclude that an applicant must demonstrate that the public convenience and
necessity require an additional utility and thus that the Commission did not
err in considering the public interest.
C. 	Whether 	the 	Commission 	Lawfully 	Denied 	Enhanced’s 	Petition 	on
Public Interest Grounds.
[¶13] 	Enhanced further argues that even assuming 9 C.M.R. 65 407
280-4 § 4(A) contains a public interest criterion, the Commission’s decision is
unlawful and unsupported by substantial evidence. 	Specifically, Enhanced
contends that (1) nothing prohibits Enhanced from seeking a CPCN in part to
acquire numbers and, in any event, number conservation is exclusively the
realm of federal regulatory control; (2) the Commission’s concerns about
Enhanced 	engaging 	in 	anti-competitive 	behavior 	were 	speculative 	and
unsupported by substantial evidence; and (3) the decision does not articulate
a 	clear 	standard 	as 	to 	what 	Enhanced 	must 	establish 	to 	alleviate 	the
Commission’s concerns about number resources and competition.
[¶14] 	Before addressing the merits of Enhanced’s arguments, 	we
reiterate several relevant findings for context. According to the Commission,
Enhanced’s petition for a CPCN to operate as a CLEC in the same service
territories as affiliated FairPoint ILECs presented an issue of first impression.

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For that reason, the Commission held an informal technical conference to
gather further information and to solicit comments from interested parties.
The 	Commission 	found, 	based 	on 	Enhanced’s 	representations 	at 	the
conference, that (1) Enhanced sought authorization as a CLEC in order to
acquire local telephone number resources; (2) Enhanced did not intend to
offer any service that is not already offered to customers in those service
territories; 	and 	(3) 	there 	was 	no service 	that, without 	authorization 	for
Enhanced to provide service as a CLEC, Enhanced or FairPoint would be
unable to offer. 	The Commission concluded that the public necessity and
convenience would not be furthered 	by 	granting Enhanced’s petition 	to
provide service as a CLEC solely for the purpose of acquiring blocks of
sequential numbers.
[¶15] 	It is undisputed that Enhanced had the burden of proof to
establish that it met all applicable criteria to obtain approval for a CPCN, and
further, as the party seeking to vacate the agency’s decision, that it has the
burden of persuasion on appeal. See Kelley v. Me. Pub. Emps. Ret. Sys., 2009 ME
27, ¶ 16, 967 A.2d 676. 	“When an agency concludes that the party with the
burden of proof failed to meet that burden, we will reverse that determination
only if the record compels a contrary conclusion to the exclusion of any other

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inference.” 	Id. 	For the reasons set forth above, Enhanced’s burden included
establishing that the public interest required an additional utility. See 9 C.M.R.
65 407 280-4 § 4(A). 	Enhanced does not challenge the Commission’s factual
findings 	regarding 	Enhanced’s 	service 	plans 	and 	motivation 	to 	obtain
numbers. Notably, and more importantly, Enhanced fails to articulate or point
to any evidence showing why the Commission was compelled to find that
granting the petition was in the public interest. 	Instead, Enhanced asserts
that because the three criteria set forth in 9 C.M.R. 65 407 280-4 § 4(A)(1)-(3)
were satisfied, it was entitled to a CPCN, and the reasons that the Commission
cited 	in 	denying 	the 	petition—number 	resource 	conservation 	and 	anti-
competitive concerns—cannot sustain the decision. We disagree.
[¶16] 	Enhanced is correct that number resource conservation is a
subject committed to federal regulatory control.5 	The Commission’s stated
concerns about the depletion of numbers within the 207 area code did not,
however, amount to an unlawful encroachment upon federal regulatory
power. 	Rather, the Commission’s stated concern addressed the undisputed
5 The FCC has “exclusive jurisdiction over those portions of the North American Numbering Plan
that pertain to the United States.” 47 U.S.C.S. § 251(e)(1) (LEXIS through Pub. L. No. 115-45). The
North American Numbering Plan (NANP) is administered by the North American Numbering Plan
Administrator (NANPA). 	See 47 C.F.R. § 52.13(a) (2017). 	The FCC has implemented number
conservation policies designed to “prolong the life of the [NANP].” See Sprint Corp. v. FCC, 331 F.3d
952, 955 (D.C. Cir. 2003) (quotation marks omitted). 	The FCC’s regulatory authority to manage
number resources is exclusive, except where the FCC has delegated authority to state and local
governments. See id. at 960.

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motivation for Enhanced’s petition and constituted a valid exercise of the
Commission’s power to determine whether granting the petition was in the
public interest. 	See 35-A M.R.S. § 2105(1); 9 C.M.R. 65 407 280-4 § 4(A).
Similarly, the Commission did not affirmatively find that Enhanced would
engage in anti-competitive behavior, but concluded, in light of the undisputed
relationship between Enhanced and FairPoint and the comments submitted as
part of the technical conference proceeding, that the petition warranted
additional investigation before the Commission could declare that granting
the CPCN was in the public interest.
[¶17] 	Contrary to Enhanced’s contentions, the Commission did not
contravene federal law. 	The federal Telecommunications Act (the TelAct)
governs state regulatory power in the area of telecommunications service:
(a) 	In general. No State or local statute or regulation, or other
State or local legal requirement, may prohibit or have the effect of
prohibiting the ability of any entity to provide any interstate or
intrastate telecommunications service.
(b) State regulatory authority. Nothing in this section shall affect
the ability of a State to impose, on a competitively neutral basis
and consistent with section 254 [47 USCS § 254], requirements
necessary to preserve and advance universal service, protect the
public 	safety 	and 	welfare, 	ensure 	the 	continued 	quality 	of
telecommunications 	services, 	and 	safeguard 	the 	rights 	of
consumers.
47 U.S.C.S. § 253(a)-(b) (LEXIS through Pub. L. No. 115-45).

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[¶18] 	Although state commissions have limited power to prohibit
entities from entering the market to provide telecommunications service, the
power to impose requirements necessary to protect the public interest is
explicitly conferred upon state commissions by section 253(b). See 47 U.S.C.S.
§ 253(b) (LEXIS) (“Nothing in this section shall affect the ability of a State to
impose, on a competitively neutral basis . . . requirements necessary to . . .
protect the public safety and welfare . . . .”); see also Verizon New Eng., Inc. v.
Pub. Utils. Comm’n, 2005 ME 64, ¶ 22, 875 A.2d 118. We are also unpersuaded
that the Commission’s decision is not “competitively neutral” because it treats
Enhanced differently due to its affiliation with FairPoint. 	47 U.S.C.S. § 253(b)
(LEXIS). 	That affiliation is certainly relevant to whether granting Enhanced a
CPCN 	is 	in 	the 	public 	convenience 	and 	necessity, 	particularly 	given
Enhanced’s service plans and apparent motivation to obtain numbers. 	Any
disparate treatment was not unlawful because, as the Commission found,
there is no comparable entity with the same affiliate relationship seeking the
authorization that Enhanced sought for the purpose of obtaining numbers,
and it was not clear that a benefit would be realized in the form of increased
competition. 	Although 	federal 	law 	promotes 	active 	competition 	in
telecommunications markets, the entry of an additional CLEC into the same

15
market as its affiliated ILEC is not necessarily in the public interest. See Appeal
of Bretton Woods Tel. Co., 56 A.3d 1266, 1275 (N.H. 2012) (“[Section 253(a) of
the TelAct] does not evince Congress’s determination that competition in a
single service territory always is in the public good. 	The [Commission] must
still make this determination.”). 	The Commission did not contravene federal
law by imposing a requirement upon Enhanced due to its unique status.
[¶19] 	In light of the Commission’s findings that Enhanced will not
provide any new or additional service, and the purpose of the application was
to acquire sequential number blocks, the record does not compel a conclusion
that granting the petition is in the public interest. 	Enhanced points to no
evidence in the record that compels a conclusion contrary to that reached by
the 	Commission 	and 	thus 	has 	failed 	in 	its 	burden. 	We 	defer 	to 	the
Commission’s expertise in this matter and to its findings supporting the
conclusion that granting the petition would not further the public convenience
and necessity. 	See Office of the Pub. Advocate v. Pub. Utils. Comm’n, 2015 ME
113, ¶ 15, 122 A.3d 959 (stating that Commission decisions are reviewed
deferentially with due recognition for the agency’s technical expertise); Pine
Tree Tel. & Tel. Co. v. Pub. Utils. Comm’n, 631 A.2d 57, 61 (Me. 1993) (“We are
particularly reluctant to substitute our judgment for that of the [C]ommission

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because of the institutional deference we pay to its expertise; we are not a
super-commission.”).
[¶20] 	Lastly, we reject Enhanced’s argument that a public interest
criterion 	is 	a 	“rudderless” 	standard 	that 	is 	unreasonably 	difficult 	to
understand. 	A petitioner has the burden of proof to establish that granting
the CPCN is in the public convenience and necessity, i.e., has some benefit to
the public and not merely its own business interest. 	See In re Chapman,
151 Me. 68, 71, 116 A.2d 130, 132 (1955) (“[T]he convenience and necessity,
proof of which the statute requires, is the convenience and necessity of the
public, as distinguished from that of any individual, or group of individuals.”
(quoting In re Stanley, 133 Me. 91, 93, 174 A. 93, 94-95 (1934)). 	Such a
standard is a lawful requirement that comports with the statute, regulation,
and federal law. See Level 3 Commc’ns of Va. v. State Corp. Comm’n, 604 S.E.2d
71, 75 (Va. 2004) (rejecting argument that a broad public interest standard
gave the Commission “unfettered discretion” to deny a CPCN petition and
concluding that such a broad standard did not amount to an unlawful barrier
pursuant to 47 U.S.C.S. § 253(a) (LEXIS)).
[¶21] 	The Commission, based on Enhanced’s own representations
about its motivations to seek a CPCN, concluded that granting the petition was

17
not in the public convenience and necessity. Because the decision comported
with the applicable regulation, federal law, and the evidence presented to the
Commission, we affirm the Commission’s order.
The entry is:
Order 	of 	the 	Public 	Utilities 	Commission
affirmed.
Sean M. Galvin, Esq., FairPoint Communications, Manchester, New Hampshire,
and Catherine R. Connors, Esq. (orally), Pierce Atwood LLP, Portland, for
appellant Enhanced Communications of Northern New England, Inc.
Jordan D. McColman, Esq. (orally), and Mitchell M. Tannenbaum, Esq., Public
Utilities Commission, Augusta, for appellee Public Utilities Commission
Robin A. Casey, Esq., Enoch Kever PLLC, Harpswell, for appellee Time Warner
Cable Information Systems, LLC
Elizabeth J. Wyman, Esq. (orally), and Robert A. Creamer, Esq., Office of the
Public Advocate, Augusta, for appellee Office of the Public Advocate
Public Utilities Commission docket number 2015-00185
FOR CLERK REFERENCE ONLY