The opinion of the court was delivered by: CHARLES R. RICHEY
The plaintiff filed the above-captioned case under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, seeking disclosure of various information submitted to the Federal Communications Commission ("FCC", "Commission") by various telecommunications companies as part of cost justification for proposed "Open Network Architecture" (ONA) service rates. Before the Court are the defendant's Motion for Summary Judgment, the plaintiff's Motion for Partial Summary Judgment, and Motions for Summary Judgment filed by Defendant-Intervenors Bell Communications Research, Inc. ("Bellcore") and participating Bell Operating Companies
("BOCs"), U.S. West Communications, Inc. ("U.S. West"), American Telephone and Telegraph Company ("AT&T"),
and Northern Telecom, Inc. The Court heard oral arguments on the pending motions on August 19, 1992, after which supplemental memoranda were filed.
Upon careful consideration of all of the pending motions, the supporting and opposing memoranda, the arguments of counsel, the applicable law, and the entire record herein, the Court concludes that the dispositive motions of the defendant and defendant-intervenors must be granted, and the motion of the plaintiff must be denied. Despite the tenacious arguments of plaintiff to the contrary, the Court fails to see any genuine disputes as to any material facts which can preclude the entry of summary judgment in this case.
The Switching Cost Information System ("SCIS") is a computer model developed and maintained by Bell Communications Research ("Bellcore"). SCIS allows a user to estimate future costs of providing specific types of telecommunications services within a call routing network based on proprietary cost and engineering data provided by the switch vendors. Bellcore Mot. for Summary Judgment, Decl. of James F. Britt ("Britt decl.") PP 2-3. For the purposes of this litigation, the term "SCIS" also encompasses analogous computer models developed by other companies, notably by defendant-intervenor U.S. West.
These models are licensed to the Bell operating Companies ("BOCs") and other companies, pursuant to nondisclosure conditions.
The SCIS is used in conjunction with the FCC's Open Network Architecture ("ONA") policies, which require the BOCs to "unbundle" their basic regulated telecommunications services. Def. Mot. for Summary Judgment, Decl. of Mary Brown ("Brown decl."), P 2. This procedure is designed to promote efficient use of the telephone network by providers of unregulated "enhanced services" and to prevent BOCs from discriminating against independent enhanced service providers. Id. Under the ONA, BOCs must provide customers with optional unbundled features called Basic Service Elements ("BSEs"). When BOCs file tariffs containing new services, they must identify the direct costs of the new service, overhead, and ratio of unit cost to unit investment and unit price. Brown decl. P 3. Unbundled BSE's reside within electronic switches that also perform other functions. Therefore, rate development for the BSEs requires an allocation of joint and common switching costs and capacity with great specificity which requires the use of computer models such as SCIS. Id.
The computer models and accompanying materials that are at issue in this case were filed with the FCC to allow review of the BOCs' tariffs implementing the ONA program. Brown decl. P 1. By order of September 19, 1992, the Common Carrier Bureau ("Bureau") of the FCC required the BOCs to file with the FCC any computer models and associated data that were used to develop the ONA service rates in the first ONA tariffs. Brown decl. P 4. The FCC stated, however, that it would consider waiving the public filing requirement. The BOCs petitioned for waiver, arguing that public release of this information would harm the competitive proprietary interest of Bellcore and U.S. West in their computer models. Id. Telecommunications switching equipment vendors also requested waivers, claiming that release of the information would cause them competitive harm because the costing models depended upon the confidential specifications that they had supplied to Bellcore and U.S. West under non-disclosure agreements. Id. After an in camera inspection, the Commission determined that the information would be exempted from mandatory disclosure under FOIA Exemption 4, and commenced proceedings to develop a mechanism for discretionary disclosure. Brown decl. P 5.
Pursuant to the ONA proceeding, the FCC ordered Bellcore to provide access to a redacted version of the SCIS program and documentation on a confidential basis. Plaintiff Allnet, a long distance telephone carrier and participant in the ONA proceeding received access to the redacted version. Unsatisfied, plaintiff filed its FOIA request on January 6, 1992, requesting "copies and/or inspection of all of the Bell Operating Companies (BOCs) [sic] Switching Cost Information System (SCIS) models and all associated data which has been filed with the Commission, but not made publicly available." Complaint, Ex. A. The Bureau denied this request by letter dated February 7, 1992. Complaint, Ex. B. Allnet requested administrative review of the denial on March 9, 1992. When the agency did not act upon the request in a timely fashion, Allnet filed this action on June 9, 1992.
In the instant action, plaintiff initially sought an order directing defendant FCC to produce the SCIS models of the Bell Operating Companies, and all associated data. The withheld information sought in the complaint encompassed (1) SCIS computer models (including U.S. West's SCM) and instructional materials; (2) SCIS input data containing specific cost and technical information regarding the switching equipment used to provide ONA services, and (3) SCIS output reports and data assigning the investment costs of switch subcomponents to specific ONA services. Brown decl. P 8. The plaintiff, in its subsequent pleadings and at oral argument, has modified the request by withdrawing its request for input data which accompanies the SCIS software, and the actual software itself as described in the Vaughn index, Part I, Subpart A (Def. Mot. for Summary Judgment, Ex. C). The other information remains at issue, including the output data and reports and extensive descriptive and instructional material which accompanies the software.
Defendant and defendant-intervenors argue that the information sought by plaintiff is exempt from disclosure under FOIA exemption 4, 5 U.S.C. § 552(b)(4). They offer various theories to support this contention. The plaintiff counters that even if it is not entitled to summary judgment, neither is defendant because there are disputes as to material facts and plaintiff is entitled to further discovery under Fed. R. Civ. P. 56(f).
(A) The Standard of Review
Rule 56(c) of the Federal Rules of Civil Procedure requires that the Court grant a motion for summary judgment if the pleadings and supporting affidavits and other submissions "show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." "The mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). It is well established that the Court must believe the non-movant's evidence and draw all justifiable inferences in its favor. Id. at 255. However, the nonmoving party may not rest upon "mere allegations or denials," but rather must set forth specific facts, by affidavit or otherwise, showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e).
Under Exemption 4 of the FOIA, an agency may withhold information consisting of "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4). Thus the exemption covers two broad categories of information: (1) trade secrets; and (2) information which is (a) commercial or financial, and (b) obtained from a person; and (c) privileged or confidential. While there is substantial overlap in the pleadings, the defendant and defendant-intervenors AT&T and Northern Telecom rely primarily on the confidential commercial information aspect of Exemption 4; defendant-intervenor U.S. West focuses ...