MoFo Perspectives Podcast
In the first episode of our new Diversity in Practice podcast series, Director of Diversity and Inclusion Natalie Kernisant sits down with Terra Winston of Next Step Partners to discuss what steps we can take toward being an effective ally and how allyship differs from mentorship and other forms of advocacy.
Speaker: Welcome to MoFo Perspectives, a podcast by Morrison & Foerster, where we share the perspectives of our clients, colleagues, subject matter experts, and lawyers.
Natalie Kernisant: Welcome to the Diversity in Practice podcast, a part of MoFo Perspectives. My name is Natalie Kernisant, and I am the Director of Diversity and Inclusion for Morrison & Foerster. This podcast series is designed to provide a space to discuss a wide variety of issues related to diversity in the law and to introduce you to some of our talented, diverse attorneys, their areas of legal expertise, and the work that they and their MoFo allies do in furtherance of diversity, equity, and inclusion. It’s our hope that by sharing D&I best practices, wherever possible, we can help make the legal industry a more inclusive place for those who are, in the words of MoFo’s former chair, Bob Raven, just a little bit different.
Natalie Kernisant: We have with us today Terra Winston, a coach and facilitator from Next Step Partners. By way of background, I was introduced to Terra by a colleague while searching for a facilitator who could help our MoFo professionals confront, process, and share their thoughts and emotions in the aftermath of the George Floyd incident. So I asked Terra to lead a series of discussion sessions. The first was with, and for, our black professionals. The next three were for the broader MoFo community. These follow-up sessions were called how to be an effective ally. And during each of them, not only were we, I think, able to help members of the MoFo community discuss how to be more compassionate, engaged, and resilient allies, but we were also able to help people begin to articulate and confront some of the fears that often stand in the way of being a truly effective ally. And Terra was an integral part of all of this work. With that as our context, I’m really happy to say, Terra, welcome to the podcast.
Terra Winston: Hi, Natalie. I’m so excited to be here!
Natalie Kernisant: We are very excited to have you. I have to say that even though it was only a few sessions, I’m really proud of the work we did together at MoFo.
Terra Winston: Yes.
Natalie Kernisant: Yeah. It was really impactful. I think people really enjoyed it, but before we get into all of that, can you tell us a little bit about yourself, your background, and the work that you do for law firms and other organizations?
Terra Winston: Sure. I like to categorize myself as a reformed engineer and MBA. I decided to use my powers for good and not evil. I get to help people and organizations break down the barriers that keep them from their highest potential. And so with individuals, I do executive coaching and group coaching. With teams, I facilitate meetings and help them get to decisions. I do training. And then for organizations, we get to talk about culture and all the things that kind of may be unconsciously there that kind of hold people back. And so across a broad spectrum, I see myself as someone that gets to knock things down so that people can keep building up.
Natalie Kernisant: That’s awesome. Yeah. I mean, you were very helpful in sort of knocking down some of the barriers around allyship with our MoFo community. So let’s turn to the work that you did with us on allyship. First, for those who may not know much about the topic, can you help us understand what allyship means and how you differentiate allyship from, say, things like mentorship, sponsorship, or just being a supportive friend?
Terra Winston: Oh, I love that question because people are really kind of using the term and throwing it around, and people don’t always know what it means. So, first of all, we need all those things. I want sponsors, I want supportive friends, I want mentors, and ally is a role that we critically need as well. So an ally is someone who advocates on the behalf of someone else. Usually that person is different from they are, right? So I can be a straight ally for LGBTQ+ people. I can be a white ally for Asian people. So usually there’s a difference. And my difference gives me a bit of position and power to be able to speak out, even though the issue doesn’t affect me. Now, the main difference between being an ally and being a mentor or sponsor or friend is about the nature of the relationship.
Terra Winston: So to be a mentor or a sponsor, I kind of know this person, right? I’m advocating for this individual. And I have a relationship with them. Allyship is the only one where I can be a broad ally to people, even strangers that I don’t know. And I think that’s what makes it so powerful. And so my challenge to all the mentors and sponsors and supportive friends out there is as your ally hat on top of what you’re doing. So what that may look like is I may be in a meeting, and my sponsor hat says, “you know what? I think Natalie would be a great person for this opportunity.” In that same meeting, when I wear my ally hat as well, I say, “And oh, by the way, I’m not sure we’re even talking about enough women as potential for this opportunity.” So both pieces work really well together.
Natalie Kernisant: Yeah, no, it makes plenty of sense. So in your line of work, particularly in this moment, you have the opportunity to witness firsthand how difficult the work of allyship can really be. What are some of the common challenges you’ve encountered when working with people who want to be more effective allies, and what’s your advice for overcoming some of those obstacles?
Terra Winston: So the one—and we talked about the, this in our ally sessions, but it bears repeating for anyone who either didn’t go to those sessions or just everyone in general, the fear factor is by and large the biggest piece. We’re all so aware and afraid that we’re going to make a mistake, that we’re going to offend somebody, that we’re going to put our big old feet in our mouths. And people are going to judge us. They’re—I’m—they’re going to think I’m a racist. They’re going to think that I don’t care. I’m going to be embarrassed, either privately or publicly shamed on social media. That fear factor is massive. And it keeps people from speaking up and standing up. Now the key to balancing that fear factor is don’t be so invested in being right, because you’re going to be wrong.
Terra Winston: You’re going to make mistakes. There’s no other way that this works. If we all knew everything about every person at all times, we wouldn’t have time to do our day jobs. But on top of that, we wouldn’t have a world that had people of difference. So there’s a natural place. And so what I want allies to move to this idea of being comfortable with the fact that allyship is about evolution. I think I know a thing, I try something, I experiment, and then I learn from that reaction. So rather than being defensive, I learn about that. I don’t make the same mistakes twice or multiple times. I then have a new perspective, and I go into my work with something brand new. I do this for a living. I’m going to repeat this.
Terra Winston: People pay me to do this work. And I still learn things every single day and I make mistakes. And here’s the craziness. You would think that people will hold me to the highest regard, again, because I make my living doing some of this. And when I make mistakes, I say, “I’m sorry, I’ll correct that, and everyone’s fine.” So if they’re okay with it with me, trust me, they will get okay with it, with you, with the friends in their lives. I think the only other big thing that comes up for allies right now that makes it challenging is this balance between, I know I need to use my power or my privilege to say something or do something, but I don’t want to overstep my bounds. I don’t—I know I’m supposed to be centering the experiences of the people that are impacted by this, but how do I do that in a delicate way?
Natalie Kernisant: Yeah.
Terra Winston: And again, I refer to step number one, you’re going to make some mistakes. Absolutely, but something that can help you figure out where your lane lies. If you are observing something that you know is wrong or biased or on the margin, you are totally within your right to say, “Hey, I think that that policy may have a little bias in it. Hey, I think that instead of using that word, it makes more sense for us to use this word.” So you don’t have to get a silent vote from all the people impacted before you can say that. You were observing something that we have agreed is not—is a challenge for whatever reason. Now what you also want to partner that with is using your platform and privilege to give voice to—for the people that are impacted.
Terra Winston: So, how can you stop and say, “You know what? I think Lisa was trying to make a point. Lisa, what was that point?” So passing that back to them, how can you just say like one of one—something that we—most of us will never have the opportunity to do because we’re not celebrities, but one great example was right after George Floyd was murdered, there were two types of celebrities. There were the ones that were posting lots of things about their feelings, but some of the most effective ones were actually taking their big audience and then turning over for a day their social media accounts to activists that were actually in the battle. By doing that, they were showing—they were being allies, and people were very clear where those people stand, but they didn’t have to be their voice taking the front. So those are the two ways that you manage it.
Natalie Kernisant: Yeah. Yeah. It’s interesting. First of all, I love that the phrase allyship is evolution or is about evolution. I do think resilience is a key part of being an effective ally. And it’s funny because when we talk about fear, I think all too often, people believe that members of marginalized communities are they themselves either uniquely fearless or unaware of the potential consequences associated with speaking up for their own communities. But to the contrary, I think fear and anxiety are for many diverse people an everyday experience, whether it’s fear of violence and bodily harm or fear of being ostracized other or denied access to resources that can impact one’s professional development. So I hear you when you say that fear is sort of a really big challenge for allies. In fact, it’s funny. There is this eye opening study published a few years ago in the Harvard Business Review.
Natalie Kernisant: Entitled: Women and Minorities are Penalized for Promoting Diversity. The study was conducted by two professors. I think they were from the University of Colorado Boulder Business School. And it included a survey of 350 executives. Now in it, they found that when women and minorities engaged in behavior that promoted diversity within an organization, they, unlike their white and male counterparts, were often criticized and even suffered significant and ongoing reputational harm. That harm was measured by the—their employers ratings of their perceived competence and performance. Now, I bring that up just to highlight that the fear and anxiety associated with speaking up in these circumstances is real for everybody. And it’s actually, at least according to the study, more likely to negatively impact members of marginalized groups than their white allies. So with that said, I wonder if you can tell us a little bit about whether you’ve ever experienced any challenges around advancing diversity and inclusion or in practicing allyship as a result of being a woman yourself, or being a member of the black community, and if so, how did you overcome those barriers?
Terra Winston: Wow, absolutely. And before I answer that specifically, I want to highlight that everything that you just said is why allyship is so important. The people affected by it when they advocate for their own on their own behalf is they tend to get more of a retribution than other people advocating for them. Like that’s actually the definition of why allyship is so important and why it’s a key conversation to have. So now, back that to me. Absolutely, I have felt the impact of advocating. And I have people that I coach that have felt it too. I tell you a story specifically to me. When I was working at PepsiCo at the time, internally, and I was doing diversity training, and it was my very first diversity training for that when I was in PepsiCo.
Terra Winston: And what they do is they pair you as an internal person with one of the external diversity trainers. And we went into training in Atlanta for a sales team. And I was so excited and happy to talk about using examples and stories from your life. And when we got to the end of the day, when the reviews came in, my reviews were scathing.
Natalie Kernisant: Wow.
Terra Winston: And Terra was an angry black woman. She talks about all this black stuff. She had all these issues. She has a chip on her shoulders. All these things. And my co-facilitator, white, male, and gay, he said to me—he said, “Terra, one of the mistakes that you have is that people will all—because of what they see of you, they will always hear the advocacy or talking about black things louder than anyone else.” He said, “You can talk about gay issues.”
Terra Winston: “You can talk about other things, but if you talk about gender issues, because you are very visibly a woman in people’s minds or you talk about race issues, they dial up in people’s minds, they hear it. It sticks stronger.” And so what—and the habit that we had to form is I would always pound the table and go to the mat for the gay issues. And then he would go to the ones that are race issues when we work together. And people—and that little shift changed the way people perceived it. So it’s real. And it’s there. So how do you manage that when you are trying to be an advocate for yourself or for others? And again, I’m speaking right now to people who are advocating for their issue that they are part of that group.
Terra Winston: What’s really key is oftentimes we get pigeon holed and stereotyped by that single issue. We know that you’re the diversity person and you’re always going to talk about that, but then they lose the thread that you’re also an amazing litigator. They lose the thread that you’re a strong leader. So your reputation starts to build around a single issue, which then at times will—when someone says, “You know what, we’re looking for the next practice leader. We’re looking for the next whatever. Your brand is not aligned with those types of things anymore.” And so the key is how do you continue to create visibility discussion around your capabilities, as well as the fact that you’re doing this work, when the best ways to do that is to really look at who your sponsors are within an organization and make sure they’re fully armed with the multitude of what you’re doing.
Terra Winston: So that that conversation is not only about you as a person that pushes for women’s issues, you as the person that leads on LGBTQ+ rights, you as the person that is so focused on Asian rights or black rights. So by changing that narrative and making sure that your people have the ammunition, that will sometimes reduce the impact of them.
Natalie Kernisant: Yeah.
Terra Winston: The honest answer though is, if you are doing this work, there’s still going to be a little bit of what I see most in organizations, this question of, if you have time to do all of this other stuff, are you really doing your work as well as you could be? And that’s something that we culturally can fight internally to remind people that if we look at how the work is done, the quality of the work, then looking at whether or not someone is taking additional personal discretionary time to forward some of these challenges, or if I’m taking my personal discretionary time to be with my child, or to enjoy my life, or sleep, or any of the other things that I could be doing with my personal discretionary time.
Natalie Kernisant: Yeah. No. That resonates with me. And in fact, it brings me to another question that I had for you. So as a diversity professional, we often talk about how allyship is action. But in your session, you advised us not to confuse activity for progress. Can you tell us a little bit more about what you mean by that?
Terra Winston: Yes, I’m going to put that on my tombstone. I’m going to write—I’m going to make a jacket and put it on the back. Want everyone to have this t-shirt. Don’t confuse activity with impact. There’s so much—there’s so many things that we can be doing. In the middle of all the supposed boredom that we’re supposed to be having with this work-from-home COVID stuff, which I don’t know about y’all, I am not bored. There’s so many things to do. Usually things that I don’t want to do. There’s a lot of cleaning I could be doing. But in the midst of this, so now one of the really eye-opening things about systemic racism is once you are aware that it exists, you realize it is everywhere. And that by definition is why it’s called systemic.
Natalie Kernisant: Right.
Terra Winston: The best corollary is if anyone has ever had a kid with has crafts with glitter.
Natalie Kernisant: Yes, it gets everywhere!
Terra Winston: It’s everywhere and you clean up and like six weeks later, you’re like, “Why is there glitter in this weird corner?” That’s racism. So every—so as you start to get more aware, you start to realize that we’ve got police brutality, and there’s an undercurrent of racism there. And then you go, “Oh my goodness, the pancakes and the rice too. The brands have this weird racism built into them and there are statues.” And then I go into work and people with different names get hired differently. Like it is everywhere. And it’s very easy either to be overwhelmed because I don’t know where to start or what’s happening is there’s sometimes there are things that just get, they garner momentum. Things that tend to be more symbolic. So things like team names or statues or flags, like all those things are actually important. What you often hear from whether it’s activists or even when I talk to my black clients about kind of where the energy lies, there’s so much out there, you could choose any lane.
Terra Winston: I would prefer for you to choose the areas that have the most impact on people’s lives, their quality of life, their ability to make a living, their ability to really achieve at the same level as other people. And so while no one is saying don’t fix the—all the things—we need to clean up all the glitter, eventually. Focus where you may have the most impact. Now what that—it kind of does two sneaky things. One, it gives a chance for us to put energy into the things that matter. So you will hear people say, “Let’s wait a few minutes on statues and let’s make sure that voter suppression doesn’t happen.” So impacts versus activity.
Natalie Kernisant: Yeah.
Terra Winston: Then all—but it also does for my allies, this work is long. This work is about resilience. We’re not going to fix all of this in a matter of months. It’s going to take us time. And so as we unravel and reweave this American dream and this global change that we’re trying to put in place, you’ve got to maintain your energy. And unless you’re a full-time activist, which something tells me, if you listen to this podcast, you’re not. Unless you’re a full-time activist, you have to pace yourself. Rather you put your energy into the high impact things and that will help your stamina in the long run.
Natalie Kernisant: Yeah. Yeah, absolutely. I mean, in the work that I do, I often have conversations with folks who are very well-meaning, well-intentioned, and very passionate allies. And the number one complaint is that progress isn’t being made fast enough, but it is, like you say, a marathon rather than a sprint. This is work that’s been, that people have been doing for quite some time. And that will continue unfortunately for quite some time. So stamina and resilience and conserving that energy is super important in this time and in this moment. So if we switch gears a little bit, I mean, you talked a little bit about talking to your black clients. I wonder if we can delve a little bit more deeply into sort of the perspective of your black clients and what you’re hearing from them about allyship. Obviously, in this moment, allyship is taking on new meaning and new life. And so I wonder in your experience, what are you hearing from black people about what they expect from their non-black allies in this moment?
Terra Winston: Yeah. Well, so if I can speak on behalf of all black people for a moment—no person can. No one can! So, but what I’m hearing from my clients is number one, that they’re so appreciative. So appreciative of all this energy that has come from allies in this moment. Now you have to remember these battles have been going on for a very long time, with people dying, with the same frustration, with the same injustice. And it’s refreshing to finally have your experience be acknowledged when these issues have been downplayed for a very long time or even denied. And so there’s this—kind of this vast appreciation. At the same time, there’s a tentative trust. People really want to believe that this is the time it’ll be different. That the allies are really in it to make a difference. That they want to—that they really want to help.
Terra Winston: But there’s a concern—we talked about resilience and stamina. There’s a concern that the allies don’t have the stamina. Now, part of that just comes from when you haven’t been a battle that is this big, it can be overwhelming. There’s actually a natural kind of emotional arc that allies are going through. And this is Terra’s where it’s not theirs, but that we all have to acknowledge when you’ve had your entire life to live within the knowledge of this love of injustice to see these things. You get acclimated to it. It doesn’t mean that you accept it, but it’s not as jarring when you see it. And so allies, many allies are just discovering this for the first time. And so that initial emotional hit is jarring. The world has shifted in a lot of ways when your eyes open to some of these things.
Terra Winston: And so we have had to give people space to feel those emotions and kind of deal with that shock factor. Now what the—what my black clients are saying from a trust area is there’s a concern that when that shock wears off, when that interest wears off, when sports starts all over again, that people will lose interest in it. And so all that allyship will not be sustainable over the long term. So there’s that one fear. I think the other thing that the black people are saying that they need from their allies is the combined focus on both individual and systemic racism. There is so much importance and value in kind of that internal assessment, right? Where are my biases? Well, how do I influence not just mine, but the people around me? Like that individual racism is really potent and powerful.
Terra Winston: And it’s where we need in the long term to go. That can be all consuming. Like, have you seen how many books there are on anti-racism? You can spend your entire life reading, Ted—watching Ted Talks and reading—seeing movies and all that kind of stuff, having book clubs. And so what your black friends, colleagues, and citizens are asking is while you do the internal work, don’t skimp on the systemic pieces. Don’t forget to look at the fact that this conversation is not strictly about police brutality or the justice system. That’s just a symptom to the disease that is racism. And so, again, just like glitter, if you look at the workplace, there are things that are there. If you look in the healthcare system, if you look at the way food is distributed, if you look at real estate, right, there’s enough to go around that wherever you want to apply your energy, you can do really good things and just make sure that they’re happening internally for individual racism and externally for systemic racism.
Natalie Kernisant: So you that strikes me because we talked a little bit about the resilience factor and this tentative trust that black people today have in allies: hopeful, but sort of apprehensive a little bit. I wonder, in my role, and for folks who focus on talent management and diversity and inclusion, it’s really important to develop that trust with the organization. So between employees and their employer. And so I’m fortunate because I personally think, and you know through our conversations, that MoFo puts a lot of thought into how we approach diversity and inclusion. We care deeply. I think, at all levels of the organization about meeting members of the MoFo family, where they are in the moment, and we try very hard to respond to and provide support that deals directly with the issues and the real concerns our people are grappling with in real time.
Natalie Kernisant: And so, in the midst of the pandemic and the social justice movements, it’s—we’ve been challenged to sort of be innovative and creative and respond in the moment to many of the challenges or to the many challenges that our employees are facing. And that’s why I think rather than simply adopting policies and practices that are based solely on trends and benchmarking, we as a firm really rely heavily on qualitative feedback from our associates to guide our strategies and our initiatives. In fact, I remember during one of our prep conversations, I think you said something to the effect of diversity is all about the details. And I immediately thought you perfectly summed up MoFo’s general approach to D&I. We believe our D&I efforts ought to be formed by the lived experiences of our people on the ground, wherever we are.
Natalie Kernisant: And so in our current environment, we knew our people were dealing with a lot, first as a result of the pandemic, and then as we tried to digest the televised killing of an unarmed black man at the hands of a police officer. And everything that follows from that. We couldn’t just ignore the impact of these things on our people, obviously. So it was important I think for us to provide a space, first to reflect and process the flood of conflicting emotions we were all having, all of us, but then also to begin providing some guidance around how to effectively engage in the pursuit of greater justice. Talking about allyship, as you know, was for us a natural component of that guidance. So having worked closely with us to design and execute our sessions, and with the benefit of hindsight, which is always 20/20, I’m curious to get your honest feedback on sort of how we approached this critically important moment. And more importantly, honestly, I’d like to learn a little bit more about what organizations should consider as they begin to develop an organizational awareness for allyship that instills trust, not tentative trust, but trust from not only black employees, but it’s employees generally.
Terra Winston: Okay. So I know it’s going to sound like I’m biased, but honestly I think MoFo handled this moment better than so many organizations. When I talk to my other diversity and equity and inclusion consultant friends, you all did amazing. And I think the key piece that put you head and shoulders above a lot of other organizations is you recognize the need to process emotions. We spend a lot of time in workplaces trying to engineer emotions out of decisions, out of responses. So, we naturally are actually very uncomfortable with emotions, but the weird thing is, is that we keep hiring humans in our robots and they have these things calling emotions. And so in this moment, moving people too quickly to action or forward, or even when it’s well intentioned, would’ve been the wrong moment.
Terra Winston: And so MoFo did a really great job at saying like, pause, reflect, process. You as a human are allowed to do that. And we support you in doing that. And now, how can we as a community move forward past this? So I actually think that you all did really, really well with that. I think it speaks a lot to the fact that you’ve already built a culture where there is trust in order to even do that, because honestly, cultures that are low in trust don’t have enough safety to even have that group processing happen. Yeah.
Natalie Kernisant: Yeah. Psychological safety is really important.
Terra Winston: It’s huge. And so you’ve already laid the foundation so that you can have these conversations and for anyone who manages teams, that’s exactly a big part of this allyship conversation. Lay the foundation of trust in your teams and the things that you do every day. And then when I need to call someone out, then when I need to correct something, it hits totally differently. It’s less painful. Like that is the big secret, like someone once said diversity is massively simple and incredibly hard.
Natalie Kernisant: Yeah.
Terra Winston: Because the basics of what it’s about. And it’s very hard to do the basics sometimes.
Natalie Kernisant: Right.
Terra Winston: I think my advice for organizations trying to really develop more awareness of allyship. So what we ask of the allies is to put themselves at a bit of personal risk by stepping up on behalf of someone around something that doesn’t specifically benefit them.
Terra Winston: They’re using social capital, they’re leaning in a bit. What we as organizations, our responsibility when we ask them to step in that kind of way, we have a responsibility too. And so our responsibility is around creating a culture that actually diminishes the punishment for speaking up. So the—making it more common for people a) to, back to my original point, make mistakes at times. But also when the mistakes are made, that someone’s saying, “Hey, I think there’s another way, Hey, I think that maybe an impact. Hey, can we reconsider this thing? Maybe this process is not bringing everyone along.” That is something that is supported and celebrated in an organization. And again, it happens in little ways. How—what are the processes that we have to do that? So there’s a great diversity class that’s taught a company that I work with, and the facilitator, they came up with this concept of OUCH, O-U-C-H, OUCH.
Terra Winston: And what they teach in the organization is if someone says something or does something that feels a little bit uncomfortable, like it could be slightly offensive, it could be on the line. So it doesn’t have to be super serious. What you say is ouch. And that ouch just makes the person aware there’s something that they just said just didn’t sit right. It’s such a little word, but just in creating this culture where like, I get to say, “ouch,” and then you say, “Oh, I did a thing?” And you go, “Okay, I’m sorry.” And I don’t do that anymore. It completely deflated some of that fear. Like how do I call this person out? What do I say? Is it going to be a big deal? And so creating a culture where you can have more ouches and meaning, I get to say ouch, we can get past this and move on, that culture will make it much easier for allies to step up and easier for people who are right now on the fence about whether or not to be allies.
Terra Winston: They can lean into it if they know that it’s managed.
Natalie Kernisant: Yeah.
Terra Winston: The other side of that too, so often the impact of allyship is quiet. Because trust me, nobody wants anyone to walk into the middle of the room and scream, “You’re doing this all wrong!” Allyship is about pulling someone to the side, advocating in little ways. So sometimes it’s actually hard for people or allies to know that allyship works. And so what organizations can do is often—there are some more visible, not all of things, but there are at times more visible things that happen as a result of allyship where the organization can start to call things out and let people know, like we have people that were advocating for this. And therefore, that’s how we got here. That actually will embolden allies to know that they actually do make a difference.
Natalie Kernisant: So it’s interesting, because the ouch and oops paradigm that you shared with us and the work that we did and that you’ve just shared, we’ve actually employed that in a series of sessions that we’re doing. So we’re doing the 21-day challenge that I think many people at this point are aware of what that is, but for those who aren’t, it’s a challenge that for 21 consecutive days, you’d engage in some learning, whether it’s reading an article or watching a YouTube video, or listening to a podcast and there’s a curated syllabus to learn a little bit more about the black experience. And so as a firm, we’ve engaged in sort of—or we’ve committed to participating in this 21-day challenge. And as part of the discussion sessions that we run around that challenge, I’ve started telling people that they should be using the ouch oops sort of paradigm so that they can talk honestly and openly about the reading and their response to the reading, without fear of saying the wrong thing and not knowing how to confront someone who may have said something that was hurtful.
Natalie Kernisant: And I think that our MoFo family has taken to that quite well. And I hope to continue to use that in other contexts, but that is just an example of some of the many concrete ways that you helped us learn to use as we begin to understand our own privilege and the spheres in which we carry influence and how to be an effective ally. So during your session with us, you talked about this exercise you called 10 trusted advisors. I’d love for you to share with our listeners a little bit about what that exercise is designed to do and how people can use it as they begin to diversify their social and professional networks.
Terra Winston: That exercise is such an oldie but goodie. Like I absolutely love it. And every once in a while I sit my own self down and kind of see where I’m going with it. So here’s the exercise if you weren’t in one of the sessions. So write down 10 of the people that are your trusted advisors, you trust the most, excluding family members. Like no spouses, no parents, no uncles. So when you get that list down, sit back and analyze it. How much are the people the same as you? Are they all in the same industry? Do you have—is religion the common thread? How many people have a different gender identification than you do? What about race? We tend to cluster with people that are very similar to us, not surprising because we all have a lot of things in common, of course, right?
Terra Winston: You may find that all yours all came from the same high school that you went to, or you all play intramural soccer, whatever it is. So understand that and get a sense for your perspective on things on issues, the way you go about work is influenced by the fact that diversity or lack of diversity that you have on this list. Now this is not necessarily me telling you to go out and now you have to have to go and find a rainbow coalition of advisors. Do not go into the next meeting saying Terra has demanded that I have to find five of you people that have different abilities than I do. I will deny this. But what that does do, it builds some awareness that there are parts of the story that you’re missing. There are perspectives that aren’t there.
Terra Winston: How can you then cultivate in a natural way a broader network that will only benefit you? So the best way to start is start looking at the social and professional circles that you’re operating in, because whatever is on your trusted advisor list came from the spaces that you’ve been occupying. And so maybe you need to add some groups that are less homogenous. I’m not saying don’t go to the ones you always go to, but maybe you need to add groups or, and I will tell you, this happens a lot. You go into those groups and those groups do have more diversity than you expect, but we tend to cluster with certain people. So we go back in the day when you actually had to see people and have drinks with them. We go to a happy hour, but then talk to the same people we know all the time,
Terra Winston: How can you create more organic connections with different people? Are there committees that you can join that may get you out of the normal group that you’re in? Are there different areas you can move to? Do it within work. So find organic and natural ways to connect with new people. Now I will say the only space where that I don’t mind if you be a bit more intentional around diversity is when you are trying to give platforms to people,. So if you are in charge of creating a panel or you’re getting guest bloggers or you are Natalie trying to find podcast guests? Those are the times when you can say, “You know what, we’ve had a lot of women. I would love to have a male voice involved.” And then you can start going to, now we’re saying, I’m looking for some wonderful man that I can highlight on in my podcast. So that’s probably the only time when being intentional makes a difference. The rest of the time, what you want to do is create a space where you can get out and connect with more people. Because the honest answer is someone that feels very different than you. There’s always a thread of connection. We just never get to it.
Natalie Kernisant: So Terra, in closing, I have one last question for you. We’ve talked a lot about what it means to be an ally and sort of the emotions and fears that come with doing the hard work of allyship. I’m wondering if you have any advice on the flip side for how we all might begin to actively engage and leverage allies at work?
Terra Winston: Man, I know there’s a trademark on this, but just do it, like just do it. Like don’t wait for invitation. Between when the protest started and now, we all have listed probably 15 of things in our lives around us that are part of the problem. Oh, I now realize I’m always in certain meetings and certain voices always get heard and other ones never do. Oh, I go to my grocery store and I realize that there’s certain foods you can’t get anymore. Like what? I don’t care, whatever it is. You’ve got a list already of things that you know are a challenge. So start there. Don’t wait to be invited because there’s no one to invite you. There’s like—there is no moment. Like the idea of that there’s going to be this shining perfect moment for you to raise your voice and step into your greatness.
Terra Winston: Like that’s not coming. It’s, in the little things. The number of times—and I see this now, particularly with millennial and younger men. This idea of what used to be locker room talk. Oh, all boys say those things, and now, you’re more likely in a friend group for someone like, “Come on, man. That’s not cool.” Like it’s in those—remember? Diversity in the details. So lean into your moment now, and don’t wait. And if you remember that it’s about evolution and not perfection, you don’t have the room—doesn’t have to be perfect. Just do. Do, learn.
Natalie Kernisant: Right.
Terra Winston: Repeat.
Natalie Kernisant: Well, Terra, as I have come to expect, it was a pleasure talking with you today and working with you over the last few weeks. I appreciate the great work that you and your organization have done and continue to do in support of progress on these important issues and hope that this won’t be the last time that you and I speak and get to work together.
Terra Winston: Not at all. It’s been so great getting to know the MoFo family, and I just have high expectations of y’all now.
Natalie Kernisant: Well, hopefully we can live up to those, but I have faith in my MoFo family that we wouldn’t drop the ball at this moment. So thank you again.
Terra Winston: Thank you.
Speaker: Please make sure to subscribe to the MoFo Perspectives podcast so you don’t miss an episode. If you have any questions about what you heard today or would like more information on this topic, please visit mofo.com/podcasts. Again, that’s MoFo M-O-F-O.com/podcasts.
Speaker 2: [Inaudible].
Judge Sentelle: You will hear from the first petitioner.
Michael B. Hazz...: Good morning, and may it please the court. Michael B. Hazzard on behalf of petitioner Core Communications, Inc. The key to this case is the FCCs holding the transport and termination of all telecommunications exchange with the last it's subject to the compensation regime in sections 2 51 B five and two 50 D two. And with that finding in place, yes, Judge Williams.
Judge Williams: No, go ahead. I mean finish the sentence. It was hard for me to tell what, what the sentence was doing. Okay. Go ahead.
Michael B. Hazz...: With that, with that finding in place that that followed, uh, a myriad of judicial findings on the construction of the 1996 amendments to the telecommunications act, the FCC exceeded its statutory authority in three ways. First, the, the state, uh, the FCC ignored Congress's directive that the state commissions set the rate for the transport and termination of telecommunications traffic between lex under the B five D two framework.
Judge Williams: Now your, your brief, although it mentioned on page 10, uh, 2 51 I, uh, never discussed it. And you regard 2 51. I is irrelevant?
Michael B. Hazz...: No, your honor. I don't, uh, believe it's irrelevant. 2 51. I directs back to the FCCS preexisting section 2 0 1 authority, which was a source of authority that the Commission used to overwrite the section 2 51, B five and D two framework.
Judge Williams: But, but you did, you didn't find it worthwhile to discuss that in your brief either? Right?
Michael B. Hazz...: Which brief? We filed two briefs, which I--
Judge Williams: Well, I'm, he's up here as, as petitioner.
Michael B. Hazz...: I'm sorry, your honor. Anyway, Judge Williams, 2 51. I is a, is a savings clause, which directs back to section 2 0 1.
Judge Williams: Right.
Michael B. Hazz...: And it preserves the commission's rule, making authority under 2 51.
Judge Williams: I oh, not to say that. I mean, 2 51, I preserves all of 2 0 1.
Michael B. Hazz...: Correct.
Judge Williams: Not just the last sentence of 2 0 1 B.
Michael B. Hazz...: Your honor. It, it, it does indeed preserve section 2 0 1 authority.
Judge Williams: But you didn't discuss that either. Right?
Michael B. Hazz...: Well, I, I, I agree with that finding, I, I, I don't dispute that. The 2 51 I preserves 2 0 1, but only insofar as it addresses section 2 51, which is 2 51 I says nothing in the sub sec, nothing in this section shall be perceived to override the commission's two--
Judge Williams: The commission has reserved power under the 2 51. I to apply 2 0 1 to things which are, uh, within the scope of 2 51, but then it loses that authority by virtue of 2 52, which, which itself piggybacks on 2 51.
Michael B. Hazz...: Well, I, I, I, I think of the question a little bit differently. Well, the 2 0 1 authority is the rule making authority that the Supreme Court found that that was preserved. And, and, and that that's not controversial in my point, but what, what is controversial is the FCC in the 1996 amendments to the act, uh, created what the Supreme court also found was a hybrid jurisdictional framework where the FFC and the state commissions act under federal law to carry out the duties and Congress chose to have the state commissions under 2 52, uh, uh, manage, um, interconnection agreement, negotiations, arbitrations, uh, set prices, uh, review those agreements to ensure that they're in accordance with the act and we even--
Judge Williams: So a transaction legitimately classified as interstate by the FCC. It lost its regulatory authority, despite 2 51 I which you don't cite. Is that correct?
Michael B. Hazz...: There, there was no, there was no preexisting authority for let collect transfer and termination of telecommunications.
Judge Williams: Yes, there was.
Michael B. Hazz...: That that didn't exist.
Judge Williams: Your, your, your brief doesn't talk about either, uh, telecommuter I think it is, or, uh, second let's see the, uh, no tele connect, uh, or memory call. Those two applications of end to end, which Andy date, the 1996 act.
Michael B. Hazz...: Well.
Judge Williams: Hard to see why those don't continue.
Michael B. Hazz...: Well, those, those, those both involved long distance calls uh.
Judge Williams: Involved the combination of an interstate leg and an intrastate leg, which the commission under the end to end principle treated as subject to its jurisdiction all the way.
Michael B. Hazz...: Well, let, let's, let's go back to, to just that Judge Williams. If we go back to 1999, when the FCC issued its declaratory ruling, which kicked off this whole, uh, decade long of cases, the FCC said it very explicitly, if these calls terminate at the ISP servers, then this traffic is subject to 2 51, B five and 2 52 D two says explicitly--
Judge Williams: You're, you're talking about the, the, uh, application of the, or, or the, the proposition of what is a termination, but a, there appears to be nothing to say that something can't be a termination for purposes of 51, 7 0 1. And, uh, and also be a leg of an interstate communication.
Michael B. Hazz...: Well, I'll respond to that in, two ways, pre-1996 act, the jurisdictional analysis was if we know the origination and termination points and they're in the same state, it's intrastate. If the origination and termination points, are in two different states, it's interstate--
Judge Williams: I don't know if you're using termination as if it were a, a blanket established word. I, I don't think that the end to end cases actually use the word termination.
Michael B. Hazz...: Well, the, the difficulty with the end to end cases is the termination point is unknown. In this case, we now know that the termination point is known, uh, the transport and termination between Lex, uh, to, in this case, CORS customer, the ISP occurs within the scope of 2 51, B 5.
Judge Williams: That's maybe a termination within the meaning, uh, of a particular regulation that does not make it an end for purposes of the end to end principle.
Michael B. Hazz...: But, but Judge Williams, that that's not what the case--
Judge Williams: None of this was raised in your brief!
Michael B. Hazz...: Judge Williams, no, it was raised in my, our briefs. What, what the FCC found is that this traffic is subject to 2 51 B five.
Judge Williams: Yes.
Michael B. Hazz...: Right. And, and that means under the declaratory ruling under the court's decision in the first court forbearance case under the Mandamus case from last year, if, if the, if the traffic falls under 2 51, B five, then reciprocal compensation is owed. Uh, the, the, the panels of this court's opinion state that explicitly in, in both of those cases. And we, um, we, we know further that 2 52 D two talks about setting rates for reciprocal compensation. And we're talking as if, um, 2 0 1 is some form of, uh, pro-counsel imperium where they can just kind of go around and override any provision of the 1996 act once. And the Supreme court has found--
Judge Williams: Let let me ask you this is, is there any context in which 2 51 I and 2 0 1, uh, which is as brought back into, as brought into the picture or kept in the picture by 2 51 I, uh, have any application within the domain of 51, 2 52?
Michael B. Hazz...: Yes.
Judge Williams: What?
Michael B. Hazz...: And that application is the prescription of regulations and methodologies and, and that's what--
Judge Williams: That doesn't need 2 0 1 for that, does it?
Michael B. Hazz...: That that's the source of rule making authority that the commission has and it's repeatedly reliable.
Judge: It's Iowa utilities.
Michael B. Hazz...: Excuse me.
Judge: It's Iowa utilities.
Michael B. Hazz...: That is Iowa utilities. And it's been, was reaffirmed on the eighth circuit on remand. And it was also discussed success--
Judge Williams: There's nothing in Iowa utility says that that power is exclusive. Right?
Michael B. Hazz...: Well, let, let's put it this way. 2 50, 2 51 outlines, a, a whole raft of obligation, unbundled network elements, network, interconnection, colocation. It's a whole variety of things. Those, all the terms of trade are set in 2 52 under state commission supervision at Congress's deliberate choice. Congress made that choice that the state commissions would carry out those functions and would set the rates in accordance with the FCCs methodology. The only time the FCC acts under 2 52 is if the state commission refuses to act and we don't have that situation here. Uh, but, but furthermore, what, what we're we're talking--
Judge Randolph: I just wanna be clear about your position here before you, you go further explaining it. Uh, you're arguing that these are purely intrastate. This is purely intrastate traffic?
Michael B. Hazz...: Uh, a under the commission's traditional jurisdictional analysis--
Judge Randolph: Well, the commission, the commission reached a different decision here, but.
Michael B. Hazz...: Well, I'm sorry if I may.
Judge Randolph: Is that your argument that, that this is purely intrastate traffic when it goes to an ISP?
Michael B. Hazz...: I, there are two parts of the answer. The first part is pre 1996 act before the, the high hybrid jurisdictional framework came in that that kind of really changed the whole intra interstate, uh, domain. Yes. These would be purely intrastate calls because you have two lex, the call originates with one L terminates with the other L what the Lex customer does afterwards--
Judge Randolph: Yeah, yeah, yeah. What's the second point?
Michael B. Hazz...: The second part. The second point is as the FCC found in the 1996 local competition order, and as we went through our briefs extensively, the 1996 act turned that jurisdictional notion on its head and greatly kind of expanded the scope of Congress's authority. But what Congress did was it allocated certain power to the FCC, rulemaking and methodologies, and our certain power to the state commissions acting under federal law. So even so--
Judge Randolph: Back to the point.
Michael B. Hazz...: Here's the point, Judge Randolph, seriously.
Judge Randolph: Hang on a minute. All I wanna know is, and I guess your answer is yes, that these, that your position is, these are purely intrastate and you're relying on 1996 rulings by the FCC, which the, I mean, the order we have does not agree with that proposition, but here's my question. If we disagree with you and say, no, well, it's partly in, intrastate, and it's partly interstate because the communication goes beyond simply the, ISP uh, does that mean you lose?
Michael B. Hazz...: No.
Judge Randolph: And why not?
Michael B. Hazz...: Because whether it's interstate or intrastate goes to what law applies, and there's no debate that we're, we're talking about what the federal communications act applies to. And if you look at the language of, of 2 51, B five, the transport--
Judge Randolph: If, if it's partly interstate and it's partly intrastate and you can't separate out the different parts, then 2 0 1 applies the first sentence of 2 0 1 applies.
Michael B. Hazz...: I, I, I disagree your honor, respectfully. And, and, and, and sincerely, let's look at what the statute says. The 2 51 B five talks about, uh, the transport and termination of telecommunications between LS there's, there's no debate about that. It doesn't talk about whether those telecommunications are interstate or intrastate or local or long distance. It's talking about two, two kinds of companies lack, and there's a transport function and a termination function that we provide. If you go to 2 52, 2 52 sets forth the, uh, compensation mechanism for reciprocal compensation under B five, it doesn't talk at all about whether the 2 51 B five traffic is put in one category or another. In fact, what the FCC found was Congress used the term telecommunications. And our whole point is that all telecommunications are treated the same, uh, that, and that's Congress's choice. And that was a, a big word that they used. And even the FCC acknowledges that it's not subject to, to differentiation and that that Congress could have put restrictions on it if it chose to, but it did not it. And I got to none of my argument, uh, but I'm, I'm well past my time, but--
Judge Sentelle: Yeah, you are well past your time. So if my colleagues have no further questions, uh, we'll hear from the other, uh.
Michael B. Hazz...: Thank you.
Jonathan Feinbe...: Good morning, your honors I'm Jonathan Feinberg from the New York public service commission. I'm appearing behalf of the New York commission and also the National Association of Regulatory Utility Commissioners, the National Association of State Utility Consumer Advocates, and the Pennsylvania Public Utility Commission. The issue in this case is whether the states set the prices for reciprocal compensation, uh, pursuant to 2 51, B five and 2 52 D. And the answer is a plain man manner of statutory construction is that they do 2 51 B five provides for the obligation for reciprocal compensation at a reciprocal exchange of traffic between local exchange carriers, 2 52 D two specifically refers to 2 51 B five and says the state commissions should El set, uh, terms and conditions providing for the reciprocal recovery of the costs of that exchange of traffic. We're talking you're--
Judge Williams: You do address 2 51 I uh.
Jonathan Feinbe...: In our reply brief, your honor.
Judge Williams: Basically one sentence in your brief, and then you go on to distinguish the commission's attempted use of CMS. Uh, but it doesn't seem to me, you, you don't exactly offer a construction of 2 51 I.
Jonathan Feinbe...: We adjust the FCCs argument with respect to 2 51. I, in our reply brief pages, 10 to 13.
Judge Williams: Well sometimes we, you do have a principle on that. Don't we?
Jonathan Feinbe...: Well, the--
Judge Williams: Arguments raised in our reply brief, essentially don't count.
Jonathan Feinbe...: I believe your honor, that we were the FCC in its decision makes a passing reference to 2 51 I, and--
Judge Williams: Quite a lot more than passing reference.
Jonathan Feinbe...: But 2 51, I basically just incorporates the power of under 2 0 1 if two oh, does not reach. Uh.
Judge Williams: So how, how does 2 0 1 not reach an interstate, a transaction legitimately classified by the FCC is interstate?
Jonathan Feinbe...: Because we're not talking about it. The interstate piece of the transaction. We're not talking about--
Judge Williams: I, I understand that, but I, I don't think your brief either, uh, makes any attack on the preexisting end to end doctrine or the commission's application of it.
Jonathan Feinbe...: We regard the end to end issue is irrelevant for purposes of the 2 51, B 5. 2 51 B five talks about the local exchange of traffic between two carriers. And it's concerned with a cost recovery, particularly by the terminating carrier of the, of the, of the terminate of the call. And that piece of cost recovery is independent of and cere from the rest of the, of the traffic. I mean, it can be argued that the call--
Judge Williams: That would've been, that would've been true if the former applications to the end end principle, wouldn't it? Let's say the, the, the segments would've been severable and the commission didn't sever them.
Jonathan Feinbe...: But the commission, the, as the Congress covered them, Congress said--
Judge Williams: But it also included 2 51, I, which you didn't regard as worth construing.
Jonathan Feinbe...: We, the FCC is saying 2 51 I on its face only preserves the FCCs preexisting authority under two one, this court in the Bell Atlantic case--
Judge Williams: Stop there.
Jonathan Feinbe...: Okay.
Judge Williams: Stop there. If, if the sort of transaction involved here had come up in 1995, would the commission not have had power to regulate it under 201?
Jonathan Feinbe...: No, because this.
Judge Williams: Why not?
Jonathan Feinbe...: These sorts of transactions would not have existed in 1995. The, if, if in fact there was a, at any sort of transaction like this, it would've been treated as a local call because there would've been the IEC would've carried the C the incumbent local exchange company. Would've carried the call to the ISP and the end user making that call would've paid the paid for that cost. It's only with the development of the 1996 act that we have the development of these reciprocal compensation regimes that we have an obligation under 2 52, that the, the terminating local exchange company be paid by the originating carrier for the costs of that termination. And we're only talking about a piece, a unique and specific piece of the call that Congress addressed in two, in, in 2 52 D that re that, that obligation in 2 51, B five to take the traffic did not exist before the 1996 act. The obligation created by 252 D for re for recovery of costs did not exist before the 1996 act. And the state commission's role to implement federal statutes--
Judge Williams: There was a broad interconnection due they for of the 1996 act, right?
Jonathan Feinbe...: Under 2 0 1. Yes. But the Congress specifically carved out this particular transaction and gave it special treatment, including this--
Judge Williams: Sort of standard pattern was, uh, a local monopoly franchise monopoly.
Jonathan Feinbe...: Yes, your honor.
Judge Williams: So that, that was standard. Was that invariable?
Jonathan Feinbe...: Generally across the country--
Judge Williams: Generally.
Jonathan Feinbe...: There was general, there was--
Judge Williams: General.
Judge Sentelle: Generally is a good word, but it was not invariable. Was it?
Jonathan Feinbe...: The, the only exception I know is the New York commission and some other commissions had been opening up, uh, local exchange access to other provide competing care.
Judge Sentelle: So the only exception establishes that there was at least exception.
Jonathan Feinbe...: There, there was state create exceptions, but in terms of the federal law, the, the, there was no federal obligation for, for interconnection on the local level.
Judge Williams: Even, even with respect to a, an interstate call?
Jonathan Feinbe...: An interstate, a call would've been handled as a matter of ex exchange access. That's like a different matter than re re uh, recipro compensation. We're not that doesn't involve calls transferred between carriers on a local level that talks about the access to the local areas via, uh,
Judge Williams: I understand.
Jonathan Feinbe...: An exchange tariff, which is a very different thing, reciprocal compensation than, than the transport and termination of local traffic pursuant to 2 51 B five.
Judge Randolph: So for your, your position is that under 2 52, this, the state commission as Has the, has the authority to set rates for the reciprocal conversation for interstate calls?
Jonathan Feinbe...: No, the we're setting this we're setting the local piece, we're setting the piece that deals with the exchange of traffic on a local basis. And one of the, one of the problems with the, the FCCS position, this case is it's trying to read out the language of transport and termination from 2 51 B five and we're, and it's also ignoring that we're talking about a, a two party transaction that is local exchange of traffic between the, uh, an originating, a local exchange carrier, and a, and a, and a terminating carrier. Once you, that that is the unique, special, local trans transaction that's being addressed by the state commission in this case.
Judge Sentelle: Wouldn't that go back to Judge Randolph's earlier question, and frankly, I've forgotten, which of you, he asked, I think it was you that you are treating this as an intrastate call?
Jonathan Feinbe...: We're treating a piece of the call as intrastate, and that's pursuant the federal law
Judge Sentelle: [Inaudible].
Jonathan Feinbe...: And the, and as Judge Randolph pointed out in the Iowa case, the Supreme Court provided for an FCC method setting of a methodology, but the states implement that regime pursuant to federal law. That is the regime that Congress intended. And that it's the one specifically--
Judge Williams: But it not utility certainly didn't say that was exclusive. Right?
Jonathan Feinbe...: But there's no other in there's no other basis.
Judge Williams: The problem before us wasn't present in Iowa utilities, right?
Jonathan Feinbe...: Yes. But there's nothing that would suggest that 2 0 1 gives the state give these, gives the FCC power to set a rate for these calls.
Judge Williams: Except except that the call as a whole under established , uh, FCC rulings is taken as a whole interstate. That's the only thing.
Jonathan Feinbe...: Yes. But Congress specifically carved out this particular transaction, your honor, I'd like to reserve the remain of my time for rebuttal. Thank you.
Judge Sentelle: Thank you, counsel. We'll hear from the commission.
Joseph Palmore: Good morning. May it please the court. I'm Joseph Palmore here on behalf of the FCC. I think the exchange between judge Williams and Mr. Hazard, um, really gets to the nub of this case, which is what does section 2 51 I say. And what per does it serve in this regulatory scheme? Section 2 51 eye on its plain terms says that the nothing in section 2 51 shall be read to, to limit or otherwise affect the commission's authority under section 2 0 1. Now we've heard two, a couple different glosses that, yes, your honor?
Judge Sentelle: The commission, the commission's taking seems to approach the 251 I just overrides everything else in 2 51, the 2 0 1 governs everything anyway. And the 2 0 2 51 is really the reason for being there.
Joseph Palmore: I think that your honor, I don't think that's our position. I think rule, uh, 2 51, I is a rule of construction. It says nothing shall be construed to limit our otherwise effect. It doesn't, it doesn't negate anything. Um, and it says it would've been very easy for Congress if the states were right, that all Congress was concerned about. Preserving was pre-ACT interconnection, uh, authority section 2 0 1 A Congress very easily could have said 2 0 1 a there in 2 51. I Congress didn't do that. Mr. Hazard says has a different theory about 2 51. I saying that it's limited to the rule making, uh, sentence in the last sentence of 2 0 1 B again, Congress could have said that if it had wanted to, but it didn't, it said 2 0 1 generally. And any event, I would put point out that even if Mr. Hazard is right, that rule making sentence says the commission shall have authority to issue rules to implement the act section 2 0 1 itself, including the language above that in section 2 0 1 B is part of the act. So I'm not sure exactly where that argument gets him. Uh, so I think that petitioners, both petitioners position really crumbles at the outset it, because they fail to offer any, um, any substantive meaning behind this provision, which Congress--
Judge Randolph: Your position is dependent upon. Is it not that the, that the traffic to ISPs is in interstate, at least in part.
Joseph Palmore: Yes, your honor.
Judge Randolph: Why, why is that?
Joseph Palmore: Why is our position?
Judge Randolph: No. No. Why is it--
Joseph Palmore: Oh why is it.
Judge Randolph: Why is it didn't understand.
Joseph Palmore: That, that, that piece, uh, of the commission's analysis has been absolutely consistent through all three of the orders that have come before the court, and it's consistent with a long line of, of commission authority, uh, applying an end to end analysis for purposes of determining jurisdiction. This goes back to the 1980s, the enhanced services provider exemption.
Judge Randolph: If it's an area code two oh two call to somebody that's, uh, is area code 2 0 2, that's an intrastate call. Is that right?
Joseph Palmore: Well, in the, in the, in the colloquial sense, yes. It depends on what happens after that call, after that first leg of the call happens because the commission has always applied an end to end analysis.
Judge Randolph: It's the only leg.
Joseph Palmore: Oh, if that's the only leg and there's no further communication, then yes, that would be an intrastate call.
Judge Randolph: But if if at the end of that call, it's an, uh, internet service provider. The commission says, no, no, no, that's partly in interstate. And that's because the call doesn't go. It it's because the, after it to the is P then the ISP has dedicated lines that go to wherever the router is or whatever they do. And is that right?
Joseph Palmore: Well the communication continues you're right, your honor. And it continues beyond the state and beyond the country, often.
Judge Randolph: It doesn't, but it doesn't continue through by telephone companies. Right?
Joseph Palmore: Well, it, it it's, it continues in the same that, that these communications always continue. And the commission's analysis here is exactly consistent with its analysis for every form of internet access. So we, these, these orders are cited in footnotes, 69 of the order on review. We also have talked about the GTE tariff order in our brief. In case after case the commission has looked at internet access of all kinds, where you have an initial communication from a user to, uh, to a point of connection within a state. And then you have an additional communication from that point of presence onto the internet. And consistently the commission has that, that is an end to end interstate communication. And, and Judge Williams also brought up a tele connect case. The memory call case these are pre 1996 act cases. And they're completely consistent with the idea of the end to end analysis. I think the, the--
Judge Williams: In this case, uh, is it starting, we we're talking dialup, uh, when it goes from the caller to the, uh, Le it's analog, and then when it, when it reaches the, is P the further communications or digital their packets, is that correct? Or.
Joseph Palmore: That, that may be correct, your honor. I don't know that that's not an issue. You that's been, that's been briefed in this--
Judge Williams: Does anybody use dial up anymore?
Joseph Palmore: Your honor, actually, surprisingly, yes. There's evidence in the record here that I think that level three put in, and this is in the joint appendix that, uh, that currently 10% of American households are dialup internet users. That number was 20% as recently as 2007. So it's a, it's a, it's a diminishing group, but it's still a large, uh, a large number of people. And it's a highly significant issue. But going back to the memory call issue, memory call case that Judge Williams brought up there, there was a, an interstate call to, uh, to someone's house who wasn't home. And then a second communication from that house to a voicemail server that was in intrastate. And what the commission and said, there was, we are gonna view this as an end to end analysis, even though there, there was a logical break point in the middle, the commission applied as end to end analysis and said that entire communication is one interstate communication.
Judge Williams: I mean, in that case, uh, where there are two, I assume there were two separate firms, but there were also two, I'm not sure what they're called, but places where the, I mean, spots, spots on the, in the city map where the call was coming into one and then moving to another, is that not right?
Joseph Palmore: Yes, your honor.
Judge Williams: So you, so you have--
Joseph Palmore: There was a, there was a natural--
Judge Williams: Right.
Joseph Palmore: End point or intermediate point where the two networks were connected--
Judge Williams: It could, could have been broken.
Joseph Palmore: It, right. Logically could have been broken, but the commission consistent with its end to end analysis, didn't break it. And as I said, it supplied that end to end analysis across all manner of internet access. So in the cable Mo Moto motor, that resulted in the Supreme court's decision in Brandex, the commission said, this is an end-to-end interstate communication, even though the cable, um, kind of point of presence where the user connects to the internet might be within the state. The commission did the same with DSL access, which DSL actually runs along the same copper line that the, that the voice call, uh, runs over that was in the GTE tariff order that we cite. Um, Mr. Hazard--
Judge Randolph: Could there be any danger of conflicting state commission rulings, if the commission bowed out of this and had had a state commission set the, uh, rates?
Joseph Palmore: Well, I don't know that the concern exactly would be conflicting rulings, but we have a, that's not a hypothetical question cuz we had that regime for, for a few years. So in 1999, the commission said for the first time, uh, with respect to this specific dialup internet traffic, this is interstate traffic, but the commission then let the state, uh, run arbitration system proceed, uh, with respect to that traffic. And it didn't the record, uh, was pretty poor there. That's--
Judge Williams: I thought specifically the claim was that the, uh, internet traffic, uh, subsidized the local, uh, traffic, right?
Joseph Palmore: That that's the well, the local, the local, the broad mass of local phone users in a it up subsidizing dialup internet access because the, what happened was there were competitors who entered the market only to serve, um, ISP dialup, ISPs as customers. They were able to earn all of their revenue or nearly all of their revenue from.
Judge Williams: The reverse thing.
Joseph Palmore: Right from the--
Judge Williams: Direction of cross subsidy.
Joseph Palmore: Right. No, but I, it is, the point is, is, is accurate though that there is a--
Judge Sentelle: [Inaudible].
Joseph Palmore: There was a compelled subsidy there because the, the ISP dialup ISP didn't have to pay anything for the telecommunications. It was consuming instead that was paid for, by the broad mass of phone users from the Ingen. In most cases, it was the IEC. Um, Mr. Hazard says that the key to the case is that, that the commission found that this was this traffic terminated for purposes of, of 2 51, B five.
Joseph Palmore: Um, but I think that his point obscures that there are two separate questions here and the court recognized this in Bell Atlantic. Termination for purposes of, of the commission's rule 51, 7 0 1. And, and, uh, I would point out that that definition says for purposes of this Subpart, which deals only with reciprocal compensation looks at the kind of functional relationship between between two carriers. But what the court said in be Atlantic was that, that the question of jurisdiction, uh, the jurisdictional end to end analysis, which the court said there was no dispute was properly applied. Um, didn't dictate the answer to that termination question under B five. The converse it has to be true also as a logical matter, which is that the question of termination under 2 51, B five doesn't and cannot dictate the jurisdictional analysis. It's the jurisdictional analysis that is key and deposited for purposes of section 2 0 1, which is preserved by section 51 I. Um, and finally, I, I would point out, uh, that another point that my Mr. Hazard, uh, makes is that, and it's related to what I just talked about was that if, if it's in 2 51, B five, that's the end of the story here, but that's, he's reading section 2 51 B five to limit or otherwise affect the commission's section 2 0 1 authority. And that's exactly what, uh, 2 51, I says, uh, that we're not permitted to do.
Judge Randolph: On to, with respect to 2 0 1. I have two questions. Uh, fir the first question is, um, does the commission, it's the commission's position that this is a rate?
Joseph Palmore: I think so. Yes, your honor. I think, I think it is a rate and I think we had authority under section 2 0 1 to issue adjust for adjust in reasonable rate--
Judge Randolph: Well, that's the second. In your brief, you cited two, uh CEG and you gave, was two examples of when the commission has set rates under the, the first sentence of 2 0 1 B,
Joseph Palmore: Right. Correct.
Judge Randolph: Um, I, I, I haven't looked at those exam, but are there any other examples?
Joseph Palmore: Um, your honor, I believe there are other examples. I can't name them for you right now, but I would point out that I think your honor's getting at the question that the, that the interveners or that my Mr. Hazard in his capacity as an intervener has made that, uh, that section 2 0 5 is the exclusive authority to set rates. And we can't do this under section 2 0 1, even if 2 0 1 applied here.
Judge Randolph: Before you get to that, you're familiar. It, it, in these cases where you have two separate, uh, entities and they both file petitions for review, and they both get separate numbers, have we allowed before the, the, both of them to intervene in the others petition and then have the opportunity to file a 50 page brief on top of the 50 page brief they've already filed?
Joseph Palmore: Um, I don't, I--
Judge Randolph: I don't think believe I've seen that.
Joseph Palmore: Before your honor, but I don't know what the court's policy is with respect to that issue. No, but I, but I think it's significant here that this, this, uh, argument that we had to proceed under section 2 0 5, cuz that's the sole rate making provision. That's an argument that was raised only by an intervener. It wasn't raised by either petitioner in this case. So it's not properly before it was--
Judge Randolph: Well it was raised by core.
Joseph Palmore: Core as an in its interveners brief. So I, I, I don't think it can use its interveners brief to expand the, the scope of, of the arguments made, uh, by, by, uh, core as petitioner. So I don't think that argument is properly before the court but.
Judge Randolph: I, I know you say that in your brief, but the fact of the matter is the, the, the reply briefs, uh, uh, are properly address arguments that you make in, in, in support of your position. So I don't know that that really matters, but anyway, I, I cut you off.
Joseph Palmore: Right. Well, I think if you do go to the merit though, I think it's, it's clear that you look at those access charge reform orders, that, that, that the commission does have general rule-making authority to issue rules to staff was just in reasonable rates. Section 2 0 5 addresses a completely separate issue in a, a separate process, which is review of tariffs. So if you look at section 2 0 3, which is about the filing and suspension of tariffs, section 2 0 4, which is about the investigation and hearings on tariffs, section 2 0 5, then governs what happens when the commission wants to essentially pull out an unjust, an unreasonable rate from a tariff and replace it with a just and reasonable rate.
Judge Sentelle: Going back to the simplest part of the question, you are relying on the authority of the commission to make rates. You're not contending that this is a methodology.
Joseph Palmore: The, we are not contending that now I know the, our interveners have, have made that argument, but that's not, uh, that's not part of the order. Uh, that's on review here. Um, your honor, I would just, there wasn't much time spent on the merits, uh, when the petitioners were up and the arbitrary capricious claims, I would just suggest that, uh, that the court's decision in 2006, in the forbearance case, uh, while off to one side a little bit, it actually really gets to the N of those merits claims and what the commission, what the court there said was that the commission was entirely reasonable keeping the rate cap and the mirroring rule in effect because of the severe market distortions that the absence of those rules had led to. And the court ex explain that there was no discrimination here because the operating of the operation of the mirroring rule ensures that any C lec that is going to receive the triple oh seven rate would also have the, uh, ability to, to pay only triple oh seven when it terminates traffic, uh, at the lec to, and to the extent that there are CECs, that don't actually terminate--
Judge Randolph: Why would any company can to, or agree to less than that rate?
Joseph Palmore: Um, your honor, I think there there's, there's substantial evidence in the record that many petitioner companies have actually reached reciprocal compensation rates.
Judge Randolph: Yeah. But why?
Joseph Palmore: For less than, um, I think it, it may be, I'm not sure, your honor, I think it may be a matter of, of, of simplifying and reducing costs, um, and, and allowing them to--
Judge Randolph: Is it a bargaining, uh, you know, we'll drop this, if you agree to, I mean, is that the way it?
Joseph Palmore: Well, these, these rates are often reciprocal rights, so a party may say, we'll, we'll, uh, we'll pay you only triple oh three five. And that was one of the level three figures that was put in the record, uh, in a exchange, we will only, uh, have to pay you, uh, oh three, five it's. It would be reciprocal. Mr. [inaudible] may have more perspective on from the industry on why parties would want do that, but there was substantial evidence in the record here that parties were doing that. And, and we're actually reaching agreements at below oh seven.
Judge Williams: I'm sorry, just, just to make sure which is the 2006 forbearance case?
Joseph Palmore: Uh, I, your honor, I'm sorry, I don't have the citation. This was, uh, this was, uh, core asking. I think, I believe in 2004, asked the commission to, forbear from application of the rate cap and the marrying rule. We do cite this in our brief, it's one of the many, uh, core decisions. I think it was N Ray core and it has a 2006 day rate. Uh, the commission did actually forbear from a couple of the other rules we haven't talked about, but didn't forbear from the rate cap or the mirroring rule in this court.
Judge Williams: I was looking for it under C and I.
Joseph Palmore: Oh, okay. Yes. And the court, uh, found that the commission's decision to retain those rules was entirely reasonable. If there no further questions, your honor.
Judge Sentelle: If not, then we'll, uh, I believe the first petitioner council was out of time.
Speaker: Uh, no, no, we, we have interview.
Judge Sentelle: I'm sorry. We forgot the, I forgot the intervener.
Speaker: <Laugh>.
Judge Sentelle: Okay. You have five minutes.
Scott Angstreic...: Thank you, your honor, Scott Angstreich. I'm here representing AT&T and Verizon. And I'm also here on behalf of a broader group of interveners, uh, which include other incumbent telephone companies, competitors with ISP customers and wireless carriers. And as I think the questioning here, um, has revealed today that the, the central the core question really is whether Congress in enacting the 1996 act took away the commission's star of authority under 2 0 1 over interstate traffic. And that the answer to that question is found in section 2 51 I. Um, where Congress did instruct that the--
Judge Williams: The claim, the claim now is that the kind of authority exercise under 2 0 1 and pursuant to the end to end doctrine was entirely different then, because it didn't the intrastate, uh, leg was not a Lele leg.
Scott Angstreic...: That that is just not true, your honor.
Judge Williams: That's not true?
Scott Angstreic...: I mean, to the extent that there were, and going back to 19 94, 19 95, I think you had sort of comp serve in its early stages. And some of the really early enhanced service providers that maybe they weren't accessing the internet, but were providing, um, stored information services. And you could very easily have a neighboring local exchange carrier. Um, you know, I could be a bell south customer in North Carolina. I could place a local called to a GTE number, which was right next door. Um, those, their areas overlapped quite a bit and that GTE customer might be, uh, an early internet service provider or one of these enhanced service providers. And so it's not as though these calls didn't exist previously, and the FCC has been addressing them since 1983, which is the first time the commission explain that calls to one of these companies.
Scott Angstreic...: They were referred to more broadly as enhanced service providers. Cause I don't think the internet was in anybody's mind back then, but that these kinds of companies transit calls on route to their destination. I mean, you dialing up to the internet. You're not really trying to talk to, uh BITNET or whoever is your internet service by you're. You're going to look on a newspaper website, find a sports score, send an email you're communicating with the broader world. And that's why the commission is long recognized that for jurisdictional purposes, these calls don't and, um, where it gets handed off to the, the ISP or the E P, but rather end for jurisdictional purposes in, in the broader internet.
Judge Williams: Is, is there some place in what we have before us where applications of end to end embracing the Lele, uh, sort of transaction or at least as part of them are collected? Or.
Scott Angstreic...: Um, I, I don't, I know the 1999 order sites, a number of these, um, uh, end to end decisions. I don't know that the specific issues came up. I think what you find is that, um, issues tend to need to have a lot of traffic volume, therefore, a lot of dollars behind them before they percolate up through the litigation.
Judge Williams: No, I meant just FCC orders that made it clear that the, they were applying and to, and in, in a context where some of the superficially intrastate legs were lec to lec.
Scott Angstreic...: Um, you know, I, I can't think of a specific one, although it looks very similar to the what's called feature group. A it's mentioned in around paragraph 60 of the ISP remand order, um, where you would have a, a local call to access a long distance dialing platform. And you, this was how MCI initially got into long distance business, and you would get a second dial tone and you'd enter a pass code. And it's very similar to the way you, you access the internet through a dial up ISP. And those were always recognized in as interstate, rather than a local call to the platform followed by a second long distance call. Um, I'd note in the voicemail context, the, the, your honor, Judge Williams had mentioned, um, voicemail is treated as an information service because it involves the storing and processing of information. And it, even though you had a call followed by this information, service, that too treated on an end-to-end basis, um, I see, I only have a minute left and, and to the extent the court has questions, I'm happy to answer them, but.
Judge Sentelle: Seeing none. Thank you counsel.
Scott Angstreic...: Thank you, your honor.
Judge Sentelle: Uh. Mr. Hazard was out of time. We'll give you a minute and then, uh, here from Mr. Feinberg for one minute.
Michael B. Hazz...: Thank you, your honor. With, with a minute, I, I would just like to have the court recall that it's spelled Atlantic decision found that the jurisdictional nature of the traffic did not go to whether recipro compensation applied. I would also just like to, uh, correct what maybe a misunderstanding from Mr. Palmore of our position that he said that B five is the end of it. The finding that the commission made was that this traffic is subject to the B five D two framework, which puts the authority to the state commission. Finally, I wanna talk about the mirroring role, cuz it's important.
Judge Sentelle: Thank you.
Michael B. Hazz...: Congress intended under, under the B five D two framework that the cost basis, the additional cost of transporting and terminating calls would be, um, received by the, the terminating carrier in this, in this case core, um, what, what the, what the commission has done under 2 0 1 is it's prescribed a fixed rate.
Michael B. Hazz...: Um, that's far below the incremental cost standard established by the FCC under tele Rick, and then not only did it do that, uh, cuz the record evidence is that the tele Rick rates are three to 400% higher than the triple zero seven rate. Now what the mirroring rule does is it empowers the IEC on a state by state basis to make a determination of which way they're better off. And that turns, this cost based standard under D two, which, which was Congress' choice to an election by the incumbent of what is how it's better off. And the way that works out in the marketplace is if you're a net traffic originator that you send out more traffic than you receive, you're gonna be better off under the triple zero seven rate. If you receive more traffic than and you terminate, then you're gonna stick with a B five D two rate. Now the, I lec's get that choice. We do not get that choice and to answer Judge Randolph's question regarding why people would enter these even lower agreements. The, the answer in our experience is it's when people have these high, um, imbalances of traffic outbound, as opposed to inbound, which is the claim again, score.
Judge Sentelle: Okay. Thank you, counsel.
Michael B. Hazz...: Thank you.
Judge Sentelle: Hear from, uh, the other petitioner on rebuttal.
Jonathan Feinbe...: Thank you, your honor. Three points. If I might first in this court's decision in the Bell Atlantic case had found that the FCC end to end analysis did not defeat the application of 2 51 B five to these calls that these are several calls. And similarly the FCCs 2 0 1 analysis, whether under 2 51 I, or under just under 2 0 1 doesn't defeat the state power created by Congress to set the, the determinant terms and conditions for these calls pursuant to the authorization created by Congress in 2 52 D two. Uh, second point with respect to the argument that there were alleged subsidies. Well, if the FCC believed there was a problem in the rates that the state commission set for the co set for these calls, then it could have adjusted the pricing methodology, if the cost, if the price is too high, they can lower--
Judge Williams: That's a very interesting part of the brief, but it, but it is still the case that the existence of a remedy under one section does not abso facto preclude remedies under other sections.
Jonathan Feinbe...: Right. But the FCCS argument that this is a, a problem in need of a solution. And therefore we must step in fails because there's another solution.
Judge Williams: No, you're no, the you're saying there's another way to step in. And you don't like the way they did step in.
Jonathan Feinbe...: Well, the.
Judge Williams: Right.
Jonathan Feinbe...: Our view--
Judge Williams: But the, the presence of one route does not preclude the existence of the other.
Jonathan Feinbe...: But Congress created the, the route they have.
Judge Williams: That's the question for before us.
Jonathan Feinbe...: Yes, yes. And they can't say because we don't like the route that Congress created, we can impose our own, they had to, uh, do what Congress required.
Judge Randolph: Doesn't 2 52 itself, uh, recognized that the commission can, will, can set the rates, set rates for, uh, T transport and termination?
Jonathan Feinbe...: No, 2 52 D two specifically refers the state commissions.
Judge Randolph: Well, what do you, yeah, but what do you do with 2 50, 2 C or two or yeah, 2 52 D two B?
Judge Randolph: Which says that, uh, nothing in this paragraph, whatever that means authorizes the commission or any state commission to engage in any rate regulation proceeding to establish with particular additional costs. Uh, addition, in addition to reciprocal, I guess yes. Of transporting or terminating calls. So on the face of it, it, it contemplates that the commission can, in some instances, and that's the question here, set rates for transport and termination.
Jonathan Feinbe...: No, that that's, that precludes, precludes the commission from doing something additional. It's the--
Judge Randolph: Well, I know if the commission doesn't have any authority to, to, to, to act, then you don't need to preclude them from doing anything in addition to no authority.
Jonathan Feinbe...: Okay, but the addi, the state commission's power to act is created by 2 52 D two a, um, and particularly single I, which refers to state committing commission, setting prices for transport and termination. The that's the 2 52 D two B double I is an additional restriction on both the state commissions and the, and the FCC. But the--
Judge Randolph: I understand that.
Jonathan Feinbe...: But the, so the it's saying for instance, that the FCC pursuant rule making power under 2 0 1, can't have an additional proceeding to impose additional costs.
Judge Randolph: But it contemplates that the FCC can can for transport and termination set rates.
Jonathan Feinbe...: As part of its general. No, it it's talking about an exercise of the FCCS general rule, making authority with respect to it, with the methodologies the states can use. I believe that provision has to be read in concert with the AT&T case. Finally, your honor, there was a reference to the arrangements that would've been made between, uh, local exchange companies pre 1996, with respect to carriage of calls, to, to ISP numbers. I believe those would've been exchange access arrangements and covered by exchange. It would've been what they would've been exchange access arrangements covered by exchange access there. Thank you very much your honors,
Judge Sentelle: Case is submitted. Give us recess.
Bailiff: Recess please! [...].
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