1022-00001 · Northgate Networks America Inc · Pleadings & Court Filings

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION

DECLARATION OF PATRICK SALAZAR IN SUPPORT OF DEFENDANTS' MOTION TO STAY PENDING RESOLUTION OF FCC PROCEEDING

Filed: March 6, 2023

I, Patrick Salazar, hereby declare as follows:

I. INTRODUCTION AND PERSONAL BACKGROUND

1. I am the Chief Regulatory Officer of Northgate Telecommunications PLC ("Northgate" or the "Company"). I submit this declaration in support of the Motion to Stay Pending Resolution of FCC Proceeding (the "Motion to Stay") filed concurrently herewith by Defendants Northgate Telecommunications PLC and Northgate Networks America Inc. (collectively, "Defendants"). I have personal knowledge of the facts stated herein, except where indicated as being based on information and belief. This declaration is based on my personal knowledge, my review of Northgate's business records maintained in the ordinary course of business, and information that I have obtained in the course of performing my duties as Chief Regulatory Officer of Northgate Telecommunications PLC.

2. In my capacity as Chief Regulatory Officer, I am responsible for overseeing Northgate's regulatory compliance and government affairs across all jurisdictions in which Northgate operates, including the United States, the United Kingdom, and the various other international markets in which the Company maintains a presence. My responsibilities encompass oversight of Northgate's interactions with the Federal Communications Commission ("FCC"), state public utility commissions, and other telecommunications regulatory bodies. I also supervise the Company's responses to formal and informal regulatory inquiries, the preparation and filing of regulatory submissions, and the development of internal policies to ensure compliance with applicable telecommunications regulations.

3. I report directly to Sir Malcolm Prentice, KBE, Chief Executive Officer of Northgate Telecommunications PLC. In connection with both the regulatory and legal matters at issue in this declaration, I coordinate closely with James Whitford, Group General Counsel of Northgate Telecommunications PLC, and Catherine Ng, U.S. Deputy General Counsel of Northgate Networks America Inc. Through these reporting relationships and collaborative responsibilities, I maintain a comprehensive understanding of the Company's strategic, regulatory, and legal posture with respect to the matters described herein.

4. I have held the position of Chief Regulatory Officer since January 2017. Prior to assuming this role, I served as Vice President of Regulatory Affairs at Northgate Networks America Inc. from 2012 to 2016, during which time I was responsible for managing the Company's regulatory filings and proceedings before the FCC and various state commissions along the eastern seaboard. Before joining Northgate, I held positions of increasing responsibility at two other major telecommunications carriers and spent four years as an attorney-advisor in the Wireline Competition Bureau of the FCC. Over the course of my career, I have accumulated more than twenty years of experience in telecommunications regulatory matters, including extensive dealings with the FCC on interconnection, unbundling, and network access issues. I hold a Juris Doctor degree from Georgetown University Law Center (2000) and a Bachelor of Science degree in Electrical Engineering from Virginia Polytechnic Institute and State University (1996).

5. I am thoroughly familiar with the matters at issue in both this litigation and the parallel FCC proceeding designated as Docket WC-23-0042 (the "FCC Proceeding"). I have been directly involved in the Company's evaluation of interconnection requests from Ridgepoint Communications Inc. ("Ridgepoint"), the development and implementation of the Wholesale Access Policy discussed below, and the preparation of Northgate's response to the FCC complaint filed by Ridgepoint. This familiarity provides the foundation for the factual statements set forth in this declaration.

II. OVERVIEW OF NORTHGATE'S BUSINESS AND NETWORK

6. Northgate Telecommunications PLC is a public limited company organized and existing under the laws of England and Wales, registered with Companies House under Company Number 07824561, and headquartered at 14 Broadwall Lane, London SE1 9PQ, United Kingdom. Northgate was originally incorporated in 2003 and has grown, both organically and through strategic acquisitions, into one of the largest facilities-based telecommunications providers serving the transatlantic corridor.

7. Northgate's American Depositary Receipts ("ADRs") are listed on the Nasdaq Global Select Market under the ticker symbol "NTP." As of September 30, 2022, Northgate's market capitalization was approximately $11.3 billion. The Company's shares are also listed on the London Stock Exchange. Northgate is a constituent of the FTSE 250 Index and is widely held by institutional investors on both sides of the Atlantic.

8. Northgate operates in the United States through its wholly owned subsidiary, Northgate Networks America Inc. ("NNA"), a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, Virginia 22182. NNA's Employer Identification Number is 54-3298176. NNA is the operating entity responsible for Northgate's U.S. telecommunications infrastructure, customer relationships, and regulatory compliance within the United States.

9. NNA owns and operates approximately 42,000 route-miles of fiber-optic backbone and metro-ring infrastructure across 18 U.S. states, with the densest concentration of network assets located along the eastern seaboard from Massachusetts to Virginia. This infrastructure includes long-haul inter-city fiber routes, metropolitan-area ring networks, and last-mile access facilities connecting enterprise customers and carrier partners to the Northgate network. The Company's U.S. network connects to its transatlantic subsea cable systems, which provide high-capacity connectivity between the United States and Europe.

10. In addition to its core transport and connectivity services, NNA offers enterprise cloud-connectivity services and Software-as-a-Service ("SaaS") based network management platforms marketed under the trade name NorthgateOS™. NorthgateOS™ enables enterprise customers and wholesale partners to provision, monitor, and manage their network connections through a centralized, web-based portal. These value-added service offerings complement NNA's physical infrastructure and represent a growing component of the Company's U.S. revenue.

11. For the fiscal year ended December 31, 2022, Northgate reported consolidated group revenue of approximately £4.87 billion (approximately $5.96 billion at prevailing exchange rates). Of this total, U.S. revenue generated through NNA was approximately $2.41 billion, representing approximately 40.4% of the Northgate group's consolidated revenue. The United States is, by a significant margin, Northgate's largest single national market outside of the United Kingdom. Diane Okoro serves as U.S. President of NNA and oversees all aspects of NNA's operations, including network planning, sales, customer support, and government relations within the United States.

III. THE 14 DISPUTED FACILITIES

12. Ridgepoint's Complaint in this action (Dkt. 1, filed September 12, 2022) and Ridgepoint's FCC complaint filed on February 7, 2023, in Docket WC-23-0042 both concern Northgate's denial of interconnection and physical colocation requests at 14 specific Northgate central-office and meet-me-room facilities (the "14 Disputed Facilities" or the "Disputed Facilities"). These 14 facilities are located within the Philadelphia–Baltimore–Washington, D.C. corridor and serve as critical hubs within Northgate's Mid-Atlantic fiber-optic network infrastructure.

13. The 14 Disputed Facilities, together with their street addresses, are as follows:

1. 401 N. Broad Street, Philadelphia, Pennsylvania 19108

2. 1500 Spring Garden Street, Philadelphia, Pennsylvania 19130

3. 100 Delancey Place, Cherry Hill, New Jersey 08034

4. 220 S. Warren Street, Trenton, New Jersey 08608

5. 700 E. Pratt Street, Baltimore, Maryland 21202

6. 1 W. Fayette Street, Baltimore, Maryland 21201

7. 33 S. Gay Street, Baltimore, Maryland 21202

8. 9221 Corporate Boulevard, Rockville, Maryland 20850

9. 1200 New Hampshire Avenue NW, Washington, D.C. 20036

10. 600 New Jersey Avenue NW, Washington, D.C. 20001

11. 44755 Prentice Drive, Ashburn, Virginia 20147

12. 21571 Beaumeade Circle, Ashburn, Virginia 20147

13. 1807 Michael Faraday Court, Reston, Virginia 20190

14. 8100 Boone Boulevard, Tysons Corner, Virginia 22182

14. These 14 facilities serve as critical infrastructure nodes within Northgate's Mid-Atlantic fiber network. They function as aggregation points, traffic exchange hubs, and meet-me-room locations where Northgate's backbone and metro-ring fiber routes converge and where wholesale and enterprise customers interconnect with Northgate's network. Several of these facilities are located in major carrier hotel and data center campuses — most notably, the two facilities in Ashburn, Virginia (Facilities 11 and 12), which are situated in the heart of one of the world's largest concentrations of data center and carrier-neutral interconnection infrastructure.

15. At the time Ridgepoint submitted its interconnection and colocation requests for the Disputed Facilities — a period spanning from approximately March 2021 through August 2022, as described in greater detail below — each of the 14 facilities was at or above 85% capacity utilization. This capacity utilization figure refers to the percentage of available physical rack space, power capacity, and cross-connect infrastructure within each facility that was already committed to existing customers, internal Northgate network equipment, or approved expansion projects. These capacity levels are documented in internal facility management reports prepared by NNA's Network Operations division in the ordinary course of business, which I have reviewed in connection with the preparation of this declaration.

IV. NORTHGATE'S WHOLESALE ACCESS POLICY

16. In January 2020, Northgate adopted its Wholesale Access Policy (the "WAP"), an internal policy governing third-party physical colocation access and new interconnection arrangements at Northgate-owned and Northgate-operated facilities in the United States. The WAP was developed by NNA's Wholesale Strategy group in consultation with the Company's Network Planning, Finance, and Legal departments. I participated in the review and approval process for the WAP in my capacity as Chief Regulatory Officer.

17. As relevant here, the WAP restricts new colocation and interconnection arrangements at capacity-constrained Northgate facilities to existing wholesale partners that maintain minimum annual revenue commitments of $5 million per year with NNA. This revenue threshold was established based on an analysis of NNA's wholesale customer portfolio, projected network capacity requirements, and the cost of accommodating new colocation deployments at high-utilization facilities. Under the WAP, requests from entities that do not meet the $5 million annual revenue threshold are subject to denial or deferral absent a specific exception approved by the U.S. President or the Chief Regulatory Officer.

18. The WAP was adopted as a legitimate business decision to optimize Northgate's limited facility capacity for higher-value wholesale relationships, particularly in light of the growing demand on Northgate's network infrastructure in the Mid-Atlantic corridor. During the period from 2018 through 2020, NNA experienced a significant increase in demand for colocation and interconnection services at its facilities along the eastern seaboard, driven in substantial part by the rapid expansion of cloud computing, content delivery, and enterprise connectivity requirements in the region. This increase in demand made it commercially necessary for Northgate to prioritize its limited physical space and power capacity for wholesale partners generating the highest revenue and the most strategically significant traffic volumes.

19. For the fiscal year ended December 31, 2021, Ridgepoint's aggregate annual spend with Northgate — including all transport, colocation, and ancillary service charges billed by NNA to Ridgepoint — was approximately $1.8 million. This figure was below the $5 million minimum annual revenue commitment threshold established by the WAP. Ridgepoint's spend had been relatively consistent at this level for several years and was not, at the time of its interconnection requests or at any point thereafter, projected to reach the $5 million threshold in the near term.

20. Between approximately March 2021 and August 2022, Ridgepoint submitted interconnection and physical colocation requests for each of the 14 Disputed Facilities identified in Section III above. Each request was processed through NNA's standard wholesale provisioning workflow, reviewed by the relevant facility management teams, and evaluated against the criteria established by the WAP. Northgate declined each of the 14 requests, citing three principal grounds: (a) capacity constraints at the requested facilities, each of which was at or above 85% utilization at the time of the request; (b) the absence of a prior course of dealing between Ridgepoint and Northgate at the specific facilities in question, as Ridgepoint had never been colocated or interconnected at any of the 14 Disputed Facilities; and (c) Ridgepoint's failure to meet the WAP's $5 million minimum annual revenue commitment threshold.

21. Northgate's declination letters were prepared by NNA's Wholesale Services team, reviewed by the U.S. Deputy General Counsel, and sent to Ridgepoint's designated contact in the ordinary course. I reviewed each declination letter prior to issuance. Each letter identified the specific grounds for the denial and offered Ridgepoint the opportunity to discuss alternative arrangements, including the possibility of reaching the WAP threshold through an expanded commercial relationship with NNA.

V. PRIOR COURSE OF DEALING WITH RIDGEPOINT

22. Northgate and Ridgepoint have a prior commercial relationship that predates the events giving rise to this litigation and the FCC Proceeding. On June 15, 2015, Northgate Networks America Inc. and Ridgepoint Communications Inc. entered into a Master Interconnection Agreement (the "MIA"), a copy of which is maintained in NNA's contract management system and which I have reviewed. Under the MIA, Ridgepoint was granted physical colocation access at three Northgate facilities in northern Virginia, which allowed Ridgepoint to install and maintain its network equipment within designated cage and cabinet space at those facilities and to interconnect with Northgate's network via agreed-upon cross-connect arrangements.

23. The three facilities at which Ridgepoint was granted colocation under the MIA were located in northern Virginia. These three facilities are distinct from, and should not be confused with, the 14 Disputed Facilities that are the subject of this litigation and the FCC Proceeding. Northgate has never had a colocation or interconnection arrangement with Ridgepoint at any of the 14 Disputed Facilities. The record of Ridgepoint's colocation and interconnection at the three northern Virginia facilities is relevant here solely as background context concerning the parties' prior commercial relationship.

24. The MIA had a five-year term and expired by its own terms on June 14, 2020. In the months preceding the expiration of the MIA, Ridgepoint's account representative at NNA initiated discussions with Ridgepoint regarding the potential renewal or replacement of the agreement. Following internal review, and in light of the WAP requirements that had been adopted in January 2020 — approximately five months prior to the MIA's scheduled expiration — Northgate declined to renew the MIA on its existing terms. Northgate communicated this decision to Ridgepoint in a letter dated April 22, 2020, which I have reviewed. The letter explained that renewal of the MIA would require Ridgepoint to meet the WAP's $5 million annual revenue commitment threshold, a requirement that Ridgepoint's then-current spend level did not satisfy.

25. Following the expiration of the MIA on June 14, 2020, Ridgepoint continued to occupy the three existing colocation spaces at the northern Virginia facilities under a month-to-month holdover arrangement, as provided for under the MIA's holdover clause. Pursuant to the terms of that clause, the holdover arrangement is subject to a rate premium of 120% of the prior contractual rate. Specifically, the prior contractual colocation rate under the MIA was $12,000 per month per facility. Under the holdover arrangement, the rate increased to $14,400 per month per facility, reflecting a holdover premium of $2,400 per month per facility. In the aggregate, the holdover premium across all three facilities amounts to $7,200 per month, or $86,400 per year. Ridgepoint has continued to pay the holdover rate and remains in occupancy at the three northern Virginia facilities as of the date of this declaration.

26. I wish to emphasize that the three northern Virginia facilities subject to the expired MIA and the current holdover arrangement are entirely distinct from the 14 Disputed Facilities at issue in this litigation and the FCC Proceeding. At no point prior to March 2021 — when Ridgepoint submitted its first interconnection request for one of the 14 Disputed Facilities — did Northgate maintain any colocation or interconnection arrangement with Ridgepoint at any of those 14 locations. The absence of any prior course of dealing at the 14 Disputed Facilities was one of the grounds on which Northgate declined Ridgepoint's interconnection requests, as described in Section IV above.

VI. THE FCC PROCEEDING (DOCKET WC-23-0042)

A. Filing and Nature of the FCC Complaint

27. On February 7, 2023, Ridgepoint Communications Inc. filed a formal complaint at the Federal Communications Commission, which was designated as Docket WC-23-0042. The FCC complaint is captioned In the Matter of Northgate Networks America Inc. — Complaint Regarding Interconnection Obligations under Section 251. A copy of the FCC complaint has been produced in this litigation and is publicly available through the FCC's Electronic Comment Filing System.

28. The FCC complaint alleges that Northgate violated interconnection obligations imposed by Sections 251 and 252 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. §§ 251, 252. Specifically, Ridgepoint alleges that Northgate — either in its capacity as an incumbent local exchange carrier ("ILEC") or as a carrier with a dominant market position in the relevant geographic and product markets — is obligated under Section 251 to provide interconnection and physical colocation access at the 14 Disputed Facilities, and that Northgate's refusal to grant such access violates the statutory duty to negotiate interconnection in good faith and to provide nondiscriminatory access to network elements.

29. The FCC complaint further alleges that Northgate's Wholesale Access Policy, and specifically the $5 million minimum annual revenue commitment threshold, operates as an unreasonable and discriminatory barrier to interconnection that is inconsistent with the pro-competitive objectives of the Telecommunications Act. Ridgepoint seeks, among other things, an order from the FCC directing Northgate to provide interconnection and physical colocation access at each of the 14 Disputed Facilities on just, reasonable, and nondiscriminatory terms.

30. The FCC Proceeding has been assigned to Administrative Law Judge Robert Fenwick of the FCC's Office of Administrative Law Judges. ALJ Fenwick is an experienced adjudicator with significant expertise in telecommunications regulatory matters, including interconnection disputes and network access proceedings under Sections 251 and 252.

B. Overlap Between the FCC Complaint and the District Court Action

31. The factual core of the FCC complaint is substantially identical to the factual core of Ridgepoint's Section 2 Sherman Act claim in this Court. Although the legal frameworks differ — the FCC proceeding involves regulatory obligations under the Communications Act, while this action involves antitrust liability under the Sherman Act — the underlying factual allegations and the evidentiary record necessary to resolve each proceeding overlap to a very substantial degree.

32. Both proceedings arise from the same conduct: Northgate's denial of Ridgepoint's interconnection and physical colocation requests at the same 14 facilities in the Philadelphia–Baltimore–Washington, D.C. corridor. Both proceedings involve the same time period, the same requests, and the same Northgate declination decisions. The factual predicate is not merely similar — it is, for all practical purposes, identical.

33. Both proceedings involve a challenge to the same Wholesale Access Policy adopted by Northgate in January 2020. Ridgepoint contends — in both the FCC Proceeding and in this Court — that the WAP's $5 million minimum revenue commitment threshold is unreasonable and exclusionary. The FCC complaint characterizes the WAP as a violation of regulatory interconnection obligations, while the Complaint in this action characterizes it as evidence of anticompetitive conduct in furtherance of a monopolization or attempted monopolization claim under Section 2. But the underlying factual question — whether the WAP is a commercially reasonable business practice or an unjustified barrier to access — is the same in both forums.

34. Both proceedings require a detailed analysis of Northgate's capacity constraints at the 14 Disputed Facilities. In both the FCC Proceeding and in this action, Ridgepoint challenges Northgate's assertion that the 14 facilities were at or above 85% capacity utilization at the time of Ridgepoint's requests, and disputes whether capacity constraints provide a legitimate justification for Northgate's denial of access. Resolution of this factual issue will require review of the same facility management records, engineering assessments, and capacity planning documents in both proceedings.

35. Both proceedings involve the same prior course of dealing under the expired MIA — executed June 15, 2015, expired June 14, 2020 — and the same month-to-month holdover arrangement at the three northern Virginia facilities. Ridgepoint's theories of liability in both proceedings rely, in part, on the contention that the prior commercial relationship between the parties gives rise to an obligation (whether regulatory or antitrust-based) to continue or expand dealing.

36. In sum, Ridgepoint's allegations in both the FCC Proceeding and in this Court center on a single core question: whether Northgate's refusal to grant Ridgepoint interconnection and colocation access at the 14 Disputed Facilities constitutes unlawful exclusionary or anticompetitive conduct. The legal labels may differ — "violation of interconnection obligations" before the FCC, "monopolization" before this Court — but the factual foundation and the competitive analysis are inextricably intertwined.

C. The FCC's Specialized Expertise

37. The Federal Communications Commission possesses specialized expertise in administering and adjudicating disputes arising under Sections 251 and 252 of the Communications Act. Congress entrusted the FCC with primary responsibility for implementing the interconnection framework established by the Telecommunications Act of 1996, including the promulgation of rules governing the obligations of incumbent local exchange carriers to provide interconnection, unbundled network elements, and physical colocation access to competing carriers.

38. Section 251 of the Communications Act imposes specific interconnection obligations on telecommunications carriers, with heightened obligations applicable to ILECs. These obligations include the duty to negotiate in good faith the terms and conditions of interconnection agreements, the duty to provide interconnection at any technically feasible point within the carrier's network, and the duty to provide nondiscriminatory access to network elements at just, reasonable, and cost-based rates. Section 252 establishes detailed procedures for the negotiation, mediation, arbitration, and approval of interconnection agreements, including the role of state commissions in the arbitration and approval process. The FCC and state public utility commissions have primary responsibility for interpreting and enforcing these obligations, and have developed a substantial body of precedent and regulatory guidance on the issues at stake in this case.

39. The FCC complaint in Docket WC-23-0042 raises several key regulatory questions that are directly relevant to the antitrust claim pending before this Court. These include:

(a) Whether Northgate is properly classified as an ILEC or is otherwise subject to Section 251 interconnection obligations at the 14 Disputed Facilities. This question involves an analysis of Northgate's regulatory status with respect to each of the 14 facilities, the regulatory history of those facilities (including any prior ILEC classifications or competitive carrier designations), and the applicability of Section 251's various tiers of obligations to Northgate's operations at each location. This classification question requires the application of the FCC's specialized expertise regarding the complex regulatory history of the Telecommunications Act's competitive framework.

(b) Whether the 14 Disputed Facilities are subject to unbundling and physical colocation requirements under FCC rules. The FCC has promulgated detailed rules governing physical colocation obligations, including rules specifying the circumstances under which a carrier must provide colocation access and the conditions under which such access may be denied. Whether the 14 Disputed Facilities fall within the scope of these rules requires an application of the FCC's regulatory framework that the FCC is uniquely positioned to undertake.

(c) Whether the Wholesale Access Policy's $5 million minimum revenue commitment constitutes a commercially reasonable access standard or an unlawful barrier under the regulatory framework. The FCC has developed a body of precedent interpreting the concept of "just, reasonable, and nondiscriminatory" terms and conditions for interconnection and colocation access. The question of whether the WAP's revenue threshold is commercially reasonable or constitutes an unreasonable barrier is inherently a regulatory question that implicates the FCC's specialized understanding of industry economics, cost structures, and competitive dynamics.

(d) Whether capacity constraints at ≥85% utilization provide a legally sufficient justification for denying colocation requests under FCC rules. The FCC has addressed the question of space constraints and their role as a justification for denying colocation requests in prior proceedings and rulemakings. Whether Northgate's asserted capacity limitations at the 14 Disputed Facilities constitute a valid basis for denial under the applicable regulatory standards is a question that the FCC is best positioned to resolve.

(e) What obligations, if any, attach to the expired MIA and the month-to-month holdover arrangement. The regulatory significance of the parties' prior interconnection agreement and the holdover arrangement — including whether the existence of those arrangements gives rise to ongoing interconnection obligations — is a question that falls squarely within the FCC's regulatory expertise.

40. Each of these questions requires the application of specialized technical and policy expertise that the FCC possesses by virtue of its statutory mandate and decades of experience administering the telecommunications regulatory framework. This Court, while fully competent to adjudicate the antitrust claims before it, would benefit significantly from the FCC's authoritative resolution of these regulatory issues before proceeding to the antitrust analysis that depends upon them.

D. Potential Impact of FCC Resolution on the Antitrust Claim

41. The FCC's resolution of Docket WC-23-0042 may be dispositive of, or materially inform, the central issues in the district court action. The relationship between the regulatory and antitrust inquiries in this case is not incidental — it is fundamental. Ridgepoint's Section 2 Sherman Act claim is premised on the theory that Northgate's refusal to deal with Ridgepoint at the 14 Disputed Facilities constitutes monopolization or attempted monopolization of a relevant antitrust market. The viability of that theory depends, to a significant degree, on answers to questions that the FCC is uniquely qualified to provide.

42. If the FCC determines that Northgate has no interconnection obligation at the 14 Disputed Facilities under Sections 251 and 252 — for example, because Northgate is not classified as an ILEC at those locations, or because the facilities are not subject to physical colocation requirements under the applicable rules — that finding would significantly undermine Ridgepoint's Section 2 refusal-to-deal theory. The Supreme Court's decision in Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), makes clear that the existence or absence of a regulatory duty to deal is highly relevant to, and may be dispositive of, the question whether a refusal to deal can give rise to antitrust liability. If the FCC finds that no regulatory obligation to provide access exists, Ridgepoint's contention that Northgate had a "duty to deal" — a prerequisite to its refusal-to-deal theory — would be substantially weakened, if not eliminated.

43. Conversely, if the FCC finds that Northgate violated its regulatory obligations under Sections 251 and 252 by refusing to provide interconnection and colocation access at the 14 Disputed Facilities, the scope and nature of the FCC's remedial order may directly affect the relief available in this Court. An FCC order directing Northgate to provide access on specified terms and conditions could moot or substantially narrow Ridgepoint's claims for injunctive relief in this action. The FCC's findings regarding the scope and nature of any violation would also bear on the damages analysis, as Ridgepoint's claimed antitrust damages are predicated on the assumption that Northgate's refusal to deal was unlawful and caused Ridgepoint to lose profits it would otherwise have earned.

44. The FCC's characterization of the relevant competitive landscape and Northgate's market position within the regulatory framework will bear directly on market definition — a contested issue in this action. Ridgepoint's expert, Dr. Leonard Kuo of Cavendish University, has proffered a narrow market definition under which Northgate is alleged to hold approximately 68% of the relevant market. Northgate contends that the properly defined relevant market is substantially broader and that Northgate's market share within that properly defined market is approximately 31%. The FCC's analysis of the competitive conditions in the Mid-Atlantic fiber market — including the number and identity of competing carriers, the availability of alternative interconnection facilities, and the degree of competitive constraint on Northgate's pricing and access practices — will provide a factual and analytical foundation that is directly relevant to this Court's resolution of the market definition dispute.

45. In light of the foregoing, the resolution of the FCC Proceeding has the potential either to dispose of or to materially narrow the issues before this Court. Allowing the FCC to develop its factual record and issue its determination before this Court proceeds to discovery, dispositive motions, or trial will promote the efficient and informed resolution of the antitrust claims.

E. Status of the FCC Proceeding

46. As of the date of this declaration, March 6, 2023, the FCC Proceeding in Docket WC-23-0042 is in its early stages. Ridgepoint's FCC complaint was filed on February 7, 2023, less than one month before the date of this declaration. ALJ Fenwick has been assigned to the proceeding but has not yet issued a scheduling order establishing deadlines for responsive pleadings, discovery, or the evidentiary hearing. Northgate expects that ALJ Fenwick will issue such a scheduling order in the coming weeks.

47. Northgate expects to file its Answer and Affirmative Defenses in the FCC Proceeding in accordance with the schedule to be established by ALJ Fenwick, and anticipates doing so shortly after the scheduling order is issued. Northgate intends to fully participate in the FCC Proceeding and to contest both the factual allegations and the legal theories advanced by Ridgepoint in that forum.

48. Based on my experience with FCC adjudicatory proceedings, I expect that the FCC Proceeding will involve a full evidentiary hearing before ALJ Fenwick, including witness testimony from both fact and expert witnesses, the submission and exchange of documentary evidence, and comprehensive briefing on the legal and regulatory issues. This process will develop a detailed factual record on the very regulatory and competitive issues that are at the heart of this case. The FCC's proceedings are designed to provide a thorough and expert evaluation of precisely the types of interconnection, network access, and competitive dynamics questions that are central to the matters before this Court.

VII. RISK OF INCONSISTENT OUTCOMES

49. If both the FCC Proceeding and this district court action continue simultaneously on parallel tracks, there is a substantial risk of inconsistent factual findings and legal conclusions arising from the two proceedings. This risk is not hypothetical or speculative — it flows directly from the extensive overlap between the two proceedings, as described in detail in Section VI.B above.

50. The FCC may reach conclusions about Northgate's interconnection obligations — including whether Northgate is subject to Section 251 obligations at the 14 Disputed Facilities, and if so, whether Northgate has violated those obligations — that are inconsistent with this Court's findings on overlapping issues. For example, the FCC may find that the Wholesale Access Policy is commercially reasonable and consistent with regulatory requirements, while this Court might simultaneously conclude that the same policy constitutes anticompetitive conduct under the Sherman Act. Alternatively, the FCC may find that Northgate's capacity constraints at the 14 Disputed Facilities are genuine and provide a valid justification for denying colocation requests, while this Court might reach a contrary conclusion on the same factual question based on a different evidentiary record and analytical framework.

51. Similarly, the FCC's analysis of the competitive dynamics of the Mid-Atlantic fiber market — including questions of market definition, market share, and the availability of competitive alternatives — may differ from this Court's analysis of those same issues in the antitrust context. The risk that two governmental bodies will reach conflicting conclusions on the same factual and economic questions, based on overlapping but not identical records, is a significant concern that militates strongly in favor of staying this action pending the FCC's resolution of Docket WC-23-0042.

52. A stay will avoid this risk and promote consistency between regulatory and judicial determinations. The Supreme Court has long recognized that considerations of wise judicial administration counsel in favor of staying district court proceedings where a specialized federal agency is actively considering the same or closely related issues. See, e.g., Reiter v. Cooper, 507 U.S. 258, 268–69 (1993); Primary Jurisdiction Doctrine as discussed in Far East Conference v. United States, 342 U.S. 570, 574–75 (1952). The Fourth Circuit has similarly recognized the importance of avoiding inconsistent outcomes between regulatory and judicial proceedings, particularly where, as here, a specialized agency possesses expertise over the subject matter at issue and is actively engaged in a proceeding that may resolve the factual and legal questions underlying the district court action.

VIII. PREJUDICE CONSIDERATIONS

53. A stay of this action pending resolution of the FCC Proceeding will not prejudice Ridgepoint. Ridgepoint itself initiated the FCC Proceeding on February 7, 2023, by filing the complaint in Docket WC-23-0042. Having voluntarily invoked the FCC's jurisdiction over the interconnection and access issues that lie at the heart of this case, Ridgepoint cannot credibly argue that the pendency of the FCC Proceeding — or a stay of this action to allow the FCC to do its work — causes Ridgepoint undue harm. To the contrary, a stay would merely allow the regulatory process that Ridgepoint itself set in motion to proceed to its natural conclusion before this Court takes up the overlapping antitrust claims.

54. Ridgepoint's claimed damages in this action are monetary in nature. Ridgepoint seeks $127 million in alleged lost profits over a projected five-year period spanning 2022 through 2027, which Ridgepoint proposes to treble to $381 million under Section 4 of the Clayton Act, 15 U.S.C. § 15. These monetary damages, if ultimately proven, will remain fully available to Ridgepoint if and when the stay is lifted. A temporary stay does not extinguish or diminish Ridgepoint's right to pursue its damages claims; it merely defers the litigation of those claims until the FCC has had the opportunity to address the regulatory issues that may significantly inform — or dispose of — the antitrust analysis. There is no suggestion that Northgate is at risk of insolvency or that a delay in this litigation would jeopardize Ridgepoint's ability to collect any judgment that might ultimately be entered.

55. Ridgepoint continues to operate as a going concern in the Mid-Atlantic telecommunications market. Ridgepoint owns and leases approximately 6,200 route-miles of fiber-optic infrastructure and continues to serve enterprise and wholesale customers throughout the region. Ridgepoint's business operations are not dependent on access to the 14 Disputed Facilities, as Ridgepoint has never had colocation or interconnection arrangements at those facilities and has operated its business without such access for the entirety of its existence. Additionally, Ridgepoint continues to occupy the three existing colocation spaces in northern Virginia under the month-to-month holdover arrangement described in Section V above, and continues to interconnect with the Northgate network at those locations.

56. Northgate, in turn, would be prejudiced by the burden and expense of litigating two parallel proceedings on overlapping factual and legal issues. The total defense costs incurred by Northgate in connection with this district court litigation alone have already been substantial, encompassing attorneys' fees, expert consultant engagements, document collection and review, and internal resource expenditures. The prospect of simultaneously litigating the same core issues before both this Court and the FCC would impose duplicative costs and burdens on Northgate, consume the time and attention of Northgate personnel who are witnesses or custodians in both proceedings, and create the risk that Northgate's positions in one forum could be used against it in the other — notwithstanding the differences in the applicable legal standards. A stay would eliminate these prejudicial burdens and allow both parties to focus their resources on the FCC Proceeding, where the regulatory questions that underpin the antitrust analysis can be resolved by the agency best equipped to address them.

IX. CONCLUSION

57. For all of the foregoing reasons, the FCC Proceeding in Docket WC-23-0042 will address the same factual and regulatory issues that lie at the heart of Ridgepoint's Section 2 Sherman Act claim in this Court. The FCC's inquiry will encompass the same 14 Disputed Facilities, the same Wholesale Access Policy, the same capacity constraint evidence, the same prior course of dealing, and the same competitive dynamics that are central to the antitrust analysis.

58. The FCC possesses specialized expertise over the interconnection obligations, network access rules, and competitive conditions at issue. Congress specifically entrusted the FCC with the administration of the interconnection framework under Sections 251 and 252 of the Communications Act, and the FCC has developed extensive experience and a substantial body of precedent in adjudicating precisely the types of disputes presented in Docket WC-23-0042.

59. Resolution of the FCC Proceeding may be dispositive of, or at a minimum materially inform, the antitrust issues before this Court — including the critical questions of whether Northgate had a duty to deal, whether the Wholesale Access Policy is commercially reasonable, and how the relevant market should be defined.

60. A stay pending resolution of the FCC Proceeding will promote judicial economy by avoiding duplicative proceedings, will avoid the risk of inconsistent factual findings and legal conclusions, and will not prejudice either party. Ridgepoint's monetary damages claims will remain fully available when the stay is lifted, and Ridgepoint's ongoing operations in the Mid-Atlantic market will not be materially affected by a temporary stay.

61. I respectfully request that the Court grant Defendants' Motion to Stay.

ATTESTATION

I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.

Executed at Tysons Corner, Virginia, on this 6th day of March, 2023.

________________________________________

Patrick Salazar Chief Regulatory Officer Northgate Telecommunications PLC

CERTIFICATE OF SERVICE

I hereby certify that on this 6th day of March, 2023, I caused the foregoing Declaration of Patrick Salazar in Support of Defendants' Motion to Stay Pending Resolution of FCC Proceeding to be served on all counsel of record via the Court's CM/ECF electronic filing system, which will send a Notice of Electronic Filing to the following:

Victoria Hargrove, Esq. Daniel Stoyanov, Esq. HARGROVE, WINSLOW & BURKE LLP 900 17th Street NW, Suite 600 Washington, D.C. 20006 Telephone: (202) 555-4100 Facsimile: (202) 555-4101

Email: vhargrove@hwblaw.com

Email: dstoyanov@hwblaw.com

Counsel for Plaintiff Ridgepoint Communications Inc.

________________________________________

Elaine Forsythe, Esq. CALDERWOOD & HARKNESS LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-7800 Facsimile: (202) 555-7801

Email: eforsythe@calderwoodharkness.com

Counsel for Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.

RIDGEPOINT COMMUNICATIONS INC.,

Plaintiff,

NORTHGATE NETWORKS AMERICA INC. and NORTHGATE TELECOMMUNICATIONS PLC,

Defendants.

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
DECLARATION OF PATRICK SALAZAR IN SUPPORT OF DEFENDANTS' MOTION TO STAY PENDING RESOLUTION OF FCC PROCEEDING
Filed: March 6, 2023
I, Patrick Salazar, hereby declare as follows:
I. INTRODUCTION AND PERSONAL BACKGROUND
1. I am the Chief Regulatory Officer of Northgate Telecommunications PLC ("Northgate" or the "Company"). I submit this declaration in support of the Motion to Stay Pending Resolution of FCC Proceeding (the "Motion to Stay") filed concurrently herewith by Defendants Northgate Telecommunications PLC and Northgate Networks America Inc. (collectively, "Defendants"). I have personal knowledge of the facts stated herein, except where indicated as being based on information and belief. This declaration is based on my personal knowledge, my review of Northgate's business records maintained in the ordinary course of business, and information that I have obtained in the course of performing my duties as Chief Regulatory Officer of Northgate Telecommunications PLC.
2. In my capacity as Chief Regulatory Officer, I am responsible for overseeing Northgate's regulatory compliance and government affairs across all jurisdictions in which Northgate operates, including the United States, the United Kingdom, and the various other international markets in which the Company maintains a presence. My responsibilities encompass oversight of Northgate's interactions with the Federal Communications Commission ("FCC"), state public utility commissions, and other telecommunications regulatory bodies. I also supervise the Company's responses to formal and informal regulatory inquiries, the preparation and filing of regulatory submissions, and the development of internal policies to ensure compliance with applicable telecommunications regulations.
3. I report directly to Sir Malcolm Prentice, KBE, Chief Executive Officer of Northgate Telecommunications PLC. In connection with both the regulatory and legal matters at issue in this declaration, I coordinate closely with James Whitford, Group General Counsel of Northgate Telecommunications PLC, and Catherine Ng, U.S. Deputy General Counsel of Northgate Networks America Inc. Through these reporting relationships and collaborative responsibilities, I maintain a comprehensive understanding of the Company's strategic, regulatory, and legal posture with respect to the matters described herein.
4. I have held the position of Chief Regulatory Officer since January 2017. Prior to assuming this role, I served as Vice President of Regulatory Affairs at Northgate Networks America Inc. from 2012 to 2016, during which time I was responsible for managing the Company's regulatory filings and proceedings before the FCC and various state commissions along the eastern seaboard. Before joining Northgate, I held positions of increasing responsibility at two other major telecommunications carriers and spent four years as an attorney-advisor in the Wireline Competition Bureau of the FCC. Over the course of my career, I have accumulated more than twenty years of experience in telecommunications regulatory matters, including extensive dealings with the FCC on interconnection, unbundling, and network access issues. I hold a Juris Doctor degree from Georgetown University Law Center (2000) and a Bachelor of Science degree in Electrical Engineering from Virginia Polytechnic Institute and State University (1996).
5. I am thoroughly familiar with the matters at issue in both this litigation and the parallel FCC proceeding designated as Docket WC-23-0042 (the "FCC Proceeding"). I have been directly involved in the Company's evaluation of interconnection requests from Ridgepoint Communications Inc. ("Ridgepoint"), the development and implementation of the Wholesale Access Policy discussed below, and the preparation of Northgate's response to the FCC complaint filed by Ridgepoint. This familiarity provides the foundation for the factual statements set forth in this declaration.
II. OVERVIEW OF NORTHGATE'S BUSINESS AND NETWORK
6. Northgate Telecommunications PLC is a public limited company organized and existing under the laws of England and Wales, registered with Companies House under Company Number 07824561, and headquartered at 14 Broadwall Lane, London SE1 9PQ, United Kingdom. Northgate was originally incorporated in 2003 and has grown, both organically and through strategic acquisitions, into one of the largest facilities-based telecommunications providers serving the transatlantic corridor.
7. Northgate's American Depositary Receipts ("ADRs") are listed on the Nasdaq Global Select Market under the ticker symbol "NTP." As of September 30, 2022, Northgate's market capitalization was approximately $11.3 billion. The Company's shares are also listed on the London Stock Exchange. Northgate is a constituent of the FTSE 250 Index and is widely held by institutional investors on both sides of the Atlantic.
8. Northgate operates in the United States through its wholly owned subsidiary, Northgate Networks America Inc. ("NNA"), a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, Virginia 22182. NNA's Employer Identification Number is 54-3298176. NNA is the operating entity responsible for Northgate's U.S. telecommunications infrastructure, customer relationships, and regulatory compliance within the United States.
9. NNA owns and operates approximately 42,000 route-miles of fiber-optic backbone and metro-ring infrastructure across 18 U.S. states, with the densest concentration of network assets located along the eastern seaboard from Massachusetts to Virginia. This infrastructure includes long-haul inter-city fiber routes, metropolitan-area ring networks, and last-mile access facilities connecting enterprise customers and carrier partners to the Northgate network. The Company's U.S. network connects to its transatlantic subsea cable systems, which provide high-capacity connectivity between the United States and Europe.
10. In addition to its core transport and connectivity services, NNA offers enterprise cloud-connectivity services and Software-as-a-Service ("SaaS") based network management platforms marketed under the trade name NorthgateOS™. NorthgateOS™ enables enterprise customers and wholesale partners to provision, monitor, and manage their network connections through a centralized, web-based portal. These value-added service offerings complement NNA's physical infrastructure and represent a growing component of the Company's U.S. revenue.
11. For the fiscal year ended December 31, 2022, Northgate reported consolidated group revenue of approximately £4.87 billion (approximately $5.96 billion at prevailing exchange rates). Of this total, U.S. revenue generated through NNA was approximately $2.41 billion, representing approximately 40.4% of the Northgate group's consolidated revenue. The United States is, by a significant margin, Northgate's largest single national market outside of the United Kingdom. Diane Okoro serves as U.S. President of NNA and oversees all aspects of NNA's operations, including network planning, sales, customer support, and government relations within the United States.
III. THE 14 DISPUTED FACILITIES
12. Ridgepoint's Complaint in this action (Dkt. 1, filed September 12, 2022) and Ridgepoint's FCC complaint filed on February 7, 2023, in Docket WC-23-0042 both concern Northgate's denial of interconnection and physical colocation requests at 14 specific Northgate central-office and meet-me-room facilities (the "14 Disputed Facilities" or the "Disputed Facilities"). These 14 facilities are located within the Philadelphia–Baltimore–Washington, D.C. corridor and serve as critical hubs within Northgate's Mid-Atlantic fiber-optic network infrastructure.
13. The 14 Disputed Facilities, together with their street addresses, are as follows:
1. 401 N. Broad Street, Philadelphia, Pennsylvania 19108
2. 1500 Spring Garden Street, Philadelphia, Pennsylvania 19130
3. 100 Delancey Place, Cherry Hill, New Jersey 08034
4. 220 S. Warren Street, Trenton, New Jersey 08608
5. 700 E. Pratt Street, Baltimore, Maryland 21202
6. 1 W. Fayette Street, Baltimore, Maryland 21201
7. 33 S. Gay Street, Baltimore, Maryland 21202
8. 9221 Corporate Boulevard, Rockville, Maryland 20850
9. 1200 New Hampshire Avenue NW, Washington, D.C. 20036
10. 600 New Jersey Avenue NW, Washington, D.C. 20001
11. 44755 Prentice Drive, Ashburn, Virginia 20147
12. 21571 Beaumeade Circle, Ashburn, Virginia 20147
13. 1807 Michael Faraday Court, Reston, Virginia 20190
14. 8100 Boone Boulevard, Tysons Corner, Virginia 22182
14. These 14 facilities serve as critical infrastructure nodes within Northgate's Mid-Atlantic fiber network. They function as aggregation points, traffic exchange hubs, and meet-me-room locations where Northgate's backbone and metro-ring fiber routes converge and where wholesale and enterprise customers interconnect with Northgate's network. Several of these facilities are located in major carrier hotel and data center campuses — most notably, the two facilities in Ashburn, Virginia (Facilities 11 and 12), which are situated in the heart of one of the world's largest concentrations of data center and carrier-neutral interconnection infrastructure.
15. At the time Ridgepoint submitted its interconnection and colocation requests for the Disputed Facilities — a period spanning from approximately March 2021 through August 2022, as described in greater detail below — each of the 14 facilities was at or above 85% capacity utilization. This capacity utilization figure refers to the percentage of available physical rack space, power capacity, and cross-connect infrastructure within each facility that was already committed to existing customers, internal Northgate network equipment, or approved expansion projects. These capacity levels are documented in internal facility management reports prepared by NNA's Network Operations division in the ordinary course of business, which I have reviewed in connection with the preparation of this declaration.
IV. NORTHGATE'S WHOLESALE ACCESS POLICY
16. In January 2020, Northgate adopted its Wholesale Access Policy (the "WAP"), an internal policy governing third-party physical colocation access and new interconnection arrangements at Northgate-owned and Northgate-operated facilities in the United States. The WAP was developed by NNA's Wholesale Strategy group in consultation with the Company's Network Planning, Finance, and Legal departments. I participated in the review and approval process for the WAP in my capacity as Chief Regulatory Officer.
17. As relevant here, the WAP restricts new colocation and interconnection arrangements at capacity-constrained Northgate facilities to existing wholesale partners that maintain minimum annual revenue commitments of $5 million per year with NNA. This revenue threshold was established based on an analysis of NNA's wholesale customer portfolio, projected network capacity requirements, and the cost of accommodating new colocation deployments at high-utilization facilities. Under the WAP, requests from entities that do not meet the $5 million annual revenue threshold are subject to denial or deferral absent a specific exception approved by the U.S. President or the Chief Regulatory Officer.
18. The WAP was adopted as a legitimate business decision to optimize Northgate's limited facility capacity for higher-value wholesale relationships, particularly in light of the growing demand on Northgate's network infrastructure in the Mid-Atlantic corridor. During the period from 2018 through 2020, NNA experienced a significant increase in demand for colocation and interconnection services at its facilities along the eastern seaboard, driven in substantial part by the rapid expansion of cloud computing, content delivery, and enterprise connectivity requirements in the region. This increase in demand made it commercially necessary for Northgate to prioritize its limited physical space and power capacity for wholesale partners generating the highest revenue and the most strategically significant traffic volumes.
19. For the fiscal year ended December 31, 2021, Ridgepoint's aggregate annual spend with Northgate — including all transport, colocation, and ancillary service charges billed by NNA to Ridgepoint — was approximately $1.8 million. This figure was below the $5 million minimum annual revenue commitment threshold established by the WAP. Ridgepoint's spend had been relatively consistent at this level for several years and was not, at the time of its interconnection requests or at any point thereafter, projected to reach the $5 million threshold in the near term.
20. Between approximately March 2021 and August 2022, Ridgepoint submitted interconnection and physical colocation requests for each of the 14 Disputed Facilities identified in Section III above. Each request was processed through NNA's standard wholesale provisioning workflow, reviewed by the relevant facility management teams, and evaluated against the criteria established by the WAP. Northgate declined each of the 14 requests, citing three principal grounds: (a) capacity constraints at the requested facilities, each of which was at or above 85% utilization at the time of the request; (b) the absence of a prior course of dealing between Ridgepoint and Northgate at the specific facilities in question, as Ridgepoint had never been colocated or interconnected at any of the 14 Disputed Facilities; and (c) Ridgepoint's failure to meet the WAP's $5 million minimum annual revenue commitment threshold.
21. Northgate's declination letters were prepared by NNA's Wholesale Services team, reviewed by the U.S. Deputy General Counsel, and sent to Ridgepoint's designated contact in the ordinary course. I reviewed each declination letter prior to issuance. Each letter identified the specific grounds for the denial and offered Ridgepoint the opportunity to discuss alternative arrangements, including the possibility of reaching the WAP threshold through an expanded commercial relationship with NNA.
V. PRIOR COURSE OF DEALING WITH RIDGEPOINT
22. Northgate and Ridgepoint have a prior commercial relationship that predates the events giving rise to this litigation and the FCC Proceeding. On June 15, 2015, Northgate Networks America Inc. and Ridgepoint Communications Inc. entered into a Master Interconnection Agreement (the "MIA"), a copy of which is maintained in NNA's contract management system and which I have reviewed. Under the MIA, Ridgepoint was granted physical colocation access at three Northgate facilities in northern Virginia, which allowed Ridgepoint to install and maintain its network equipment within designated cage and cabinet space at those facilities and to interconnect with Northgate's network via agreed-upon cross-connect arrangements.
23. The three facilities at which Ridgepoint was granted colocation under the MIA were located in northern Virginia. These three facilities are distinct from, and should not be confused with, the 14 Disputed Facilities that are the subject of this litigation and the FCC Proceeding. Northgate has never had a colocation or interconnection arrangement with Ridgepoint at any of the 14 Disputed Facilities. The record of Ridgepoint's colocation and interconnection at the three northern Virginia facilities is relevant here solely as background context concerning the parties' prior commercial relationship.
24. The MIA had a five-year term and expired by its own terms on June 14, 2020. In the months preceding the expiration of the MIA, Ridgepoint's account representative at NNA initiated discussions with Ridgepoint regarding the potential renewal or replacement of the agreement. Following internal review, and in light of the WAP requirements that had been adopted in January 2020 — approximately five months prior to the MIA's scheduled expiration — Northgate declined to renew the MIA on its existing terms. Northgate communicated this decision to Ridgepoint in a letter dated April 22, 2020, which I have reviewed. The letter explained that renewal of the MIA would require Ridgepoint to meet the WAP's $5 million annual revenue commitment threshold, a requirement that Ridgepoint's then-current spend level did not satisfy.
25. Following the expiration of the MIA on June 14, 2020, Ridgepoint continued to occupy the three existing colocation spaces at the northern Virginia facilities under a month-to-month holdover arrangement, as provided for under the MIA's holdover clause. Pursuant to the terms of that clause, the holdover arrangement is subject to a rate premium of 120% of the prior contractual rate. Specifically, the prior contractual colocation rate under the MIA was $12,000 per month per facility. Under the holdover arrangement, the rate increased to $14,400 per month per facility, reflecting a holdover premium of $2,400 per month per facility. In the aggregate, the holdover premium across all three facilities amounts to $7,200 per month, or $86,400 per year. Ridgepoint has continued to pay the holdover rate and remains in occupancy at the three northern Virginia facilities as of the date of this declaration.
26. I wish to emphasize that the three northern Virginia facilities subject to the expired MIA and the current holdover arrangement are entirely distinct from the 14 Disputed Facilities at issue in this litigation and the FCC Proceeding. At no point prior to March 2021 — when Ridgepoint submitted its first interconnection request for one of the 14 Disputed Facilities — did Northgate maintain any colocation or interconnection arrangement with Ridgepoint at any of those 14 locations. The absence of any prior course of dealing at the 14 Disputed Facilities was one of the grounds on which Northgate declined Ridgepoint's interconnection requests, as described in Section IV above.
VI. THE FCC PROCEEDING (DOCKET WC-23-0042)
A. Filing and Nature of the FCC Complaint
27. On February 7, 2023, Ridgepoint Communications Inc. filed a formal complaint at the Federal Communications Commission, which was designated as Docket WC-23-0042. The FCC complaint is captioned In the Matter of Northgate Networks America Inc. — Complaint Regarding Interconnection Obligations under Section 251. A copy of the FCC complaint has been produced in this litigation and is publicly available through the FCC's Electronic Comment Filing System.
28. The FCC complaint alleges that Northgate violated interconnection obligations imposed by Sections 251 and 252 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. §§ 251, 252. Specifically, Ridgepoint alleges that Northgate — either in its capacity as an incumbent local exchange carrier ("ILEC") or as a carrier with a dominant market position in the relevant geographic and product markets — is obligated under Section 251 to provide interconnection and physical colocation access at the 14 Disputed Facilities, and that Northgate's refusal to grant such access violates the statutory duty to negotiate interconnection in good faith and to provide nondiscriminatory access to network elements.
29. The FCC complaint further alleges that Northgate's Wholesale Access Policy, and specifically the $5 million minimum annual revenue commitment threshold, operates as an unreasonable and discriminatory barrier to interconnection that is inconsistent with the pro-competitive objectives of the Telecommunications Act. Ridgepoint seeks, among other things, an order from the FCC directing Northgate to provide interconnection and physical colocation access at each of the 14 Disputed Facilities on just, reasonable, and nondiscriminatory terms.
30. The FCC Proceeding has been assigned to Administrative Law Judge Robert Fenwick of the FCC's Office of Administrative Law Judges. ALJ Fenwick is an experienced adjudicator with significant expertise in telecommunications regulatory matters, including interconnection disputes and network access proceedings under Sections 251 and 252.
B. Overlap Between the FCC Complaint and the District Court Action
31. The factual core of the FCC complaint is substantially identical to the factual core of Ridgepoint's Section 2 Sherman Act claim in this Court. Although the legal frameworks differ — the FCC proceeding involves regulatory obligations under the Communications Act, while this action involves antitrust liability under the Sherman Act — the underlying factual allegations and the evidentiary record necessary to resolve each proceeding overlap to a very substantial degree.
32. Both proceedings arise from the same conduct: Northgate's denial of Ridgepoint's interconnection and physical colocation requests at the same 14 facilities in the Philadelphia–Baltimore–Washington, D.C. corridor. Both proceedings involve the same time period, the same requests, and the same Northgate declination decisions. The factual predicate is not merely similar — it is, for all practical purposes, identical.
33. Both proceedings involve a challenge to the same Wholesale Access Policy adopted by Northgate in January 2020. Ridgepoint contends — in both the FCC Proceeding and in this Court — that the WAP's $5 million minimum revenue commitment threshold is unreasonable and exclusionary. The FCC complaint characterizes the WAP as a violation of regulatory interconnection obligations, while the Complaint in this action characterizes it as evidence of anticompetitive conduct in furtherance of a monopolization or attempted monopolization claim under Section 2. But the underlying factual question — whether the WAP is a commercially reasonable business practice or an unjustified barrier to access — is the same in both forums.
34. Both proceedings require a detailed analysis of Northgate's capacity constraints at the 14 Disputed Facilities. In both the FCC Proceeding and in this action, Ridgepoint challenges Northgate's assertion that the 14 facilities were at or above 85% capacity utilization at the time of Ridgepoint's requests, and disputes whether capacity constraints provide a legitimate justification for Northgate's denial of access. Resolution of this factual issue will require review of the same facility management records, engineering assessments, and capacity planning documents in both proceedings.
35. Both proceedings involve the same prior course of dealing under the expired MIA — executed June 15, 2015, expired June 14, 2020 — and the same month-to-month holdover arrangement at the three northern Virginia facilities. Ridgepoint's theories of liability in both proceedings rely, in part, on the contention that the prior commercial relationship between the parties gives rise to an obligation (whether regulatory or antitrust-based) to continue or expand dealing.
36. In sum, Ridgepoint's allegations in both the FCC Proceeding and in this Court center on a single core question: whether Northgate's refusal to grant Ridgepoint interconnection and colocation access at the 14 Disputed Facilities constitutes unlawful exclusionary or anticompetitive conduct. The legal labels may differ — "violation of interconnection obligations" before the FCC, "monopolization" before this Court — but the factual foundation and the competitive analysis are inextricably intertwined.
C. The FCC's Specialized Expertise
37. The Federal Communications Commission possesses specialized expertise in administering and adjudicating disputes arising under Sections 251 and 252 of the Communications Act. Congress entrusted the FCC with primary responsibility for implementing the interconnection framework established by the Telecommunications Act of 1996, including the promulgation of rules governing the obligations of incumbent local exchange carriers to provide interconnection, unbundled network elements, and physical colocation access to competing carriers.
38. Section 251 of the Communications Act imposes specific interconnection obligations on telecommunications carriers, with heightened obligations applicable to ILECs. These obligations include the duty to negotiate in good faith the terms and conditions of interconnection agreements, the duty to provide interconnection at any technically feasible point within the carrier's network, and the duty to provide nondiscriminatory access to network elements at just, reasonable, and cost-based rates. Section 252 establishes detailed procedures for the negotiation, mediation, arbitration, and approval of interconnection agreements, including the role of state commissions in the arbitration and approval process. The FCC and state public utility commissions have primary responsibility for interpreting and enforcing these obligations, and have developed a substantial body of precedent and regulatory guidance on the issues at stake in this case.
39. The FCC complaint in Docket WC-23-0042 raises several key regulatory questions that are directly relevant to the antitrust claim pending before this Court. These include:
(a) Whether Northgate is properly classified as an ILEC or is otherwise subject to Section 251 interconnection obligations at the 14 Disputed Facilities. This question involves an analysis of Northgate's regulatory status with respect to each of the 14 facilities, the regulatory history of those facilities (including any prior ILEC classifications or competitive carrier designations), and the applicability of Section 251's various tiers of obligations to Northgate's operations at each location. This classification question requires the application of the FCC's specialized expertise regarding the complex regulatory history of the Telecommunications Act's competitive framework.
(b) Whether the 14 Disputed Facilities are subject to unbundling and physical colocation requirements under FCC rules. The FCC has promulgated detailed rules governing physical colocation obligations, including rules specifying the circumstances under which a carrier must provide colocation access and the conditions under which such access may be denied. Whether the 14 Disputed Facilities fall within the scope of these rules requires an application of the FCC's regulatory framework that the FCC is uniquely positioned to undertake.
(c) Whether the Wholesale Access Policy's $5 million minimum revenue commitment constitutes a commercially reasonable access standard or an unlawful barrier under the regulatory framework. The FCC has developed a body of precedent interpreting the concept of "just, reasonable, and nondiscriminatory" terms and conditions for interconnection and colocation access. The question of whether the WAP's revenue threshold is commercially reasonable or constitutes an unreasonable barrier is inherently a regulatory question that implicates the FCC's specialized understanding of industry economics, cost structures, and competitive dynamics.
(d) Whether capacity constraints at ≥85% utilization provide a legally sufficient justification for denying colocation requests under FCC rules. The FCC has addressed the question of space constraints and their role as a justification for denying colocation requests in prior proceedings and rulemakings. Whether Northgate's asserted capacity limitations at the 14 Disputed Facilities constitute a valid basis for denial under the applicable regulatory standards is a question that the FCC is best positioned to resolve.
(e) What obligations, if any, attach to the expired MIA and the month-to-month holdover arrangement. The regulatory significance of the parties' prior interconnection agreement and the holdover arrangement — including whether the existence of those arrangements gives rise to ongoing interconnection obligations — is a question that falls squarely within the FCC's regulatory expertise.
40. Each of these questions requires the application of specialized technical and policy expertise that the FCC possesses by virtue of its statutory mandate and decades of experience administering the telecommunications regulatory framework. This Court, while fully competent to adjudicate the antitrust claims before it, would benefit significantly from the FCC's authoritative resolution of these regulatory issues before proceeding to the antitrust analysis that depends upon them.
D. Potential Impact of FCC Resolution on the Antitrust Claim
41. The FCC's resolution of Docket WC-23-0042 may be dispositive of, or materially inform, the central issues in the district court action. The relationship between the regulatory and antitrust inquiries in this case is not incidental — it is fundamental. Ridgepoint's Section 2 Sherman Act claim is premised on the theory that Northgate's refusal to deal with Ridgepoint at the 14 Disputed Facilities constitutes monopolization or attempted monopolization of a relevant antitrust market. The viability of that theory depends, to a significant degree, on answers to questions that the FCC is uniquely qualified to provide.
42. If the FCC determines that Northgate has no interconnection obligation at the 14 Disputed Facilities under Sections 251 and 252 — for example, because Northgate is not classified as an ILEC at those locations, or because the facilities are not subject to physical colocation requirements under the applicable rules — that finding would significantly undermine Ridgepoint's Section 2 refusal-to-deal theory. The Supreme Court's decision in Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), makes clear that the existence or absence of a regulatory duty to deal is highly relevant to, and may be dispositive of, the question whether a refusal to deal can give rise to antitrust liability. If the FCC finds that no regulatory obligation to provide access exists, Ridgepoint's contention that Northgate had a "duty to deal" — a prerequisite to its refusal-to-deal theory — would be substantially weakened, if not eliminated.
43. Conversely, if the FCC finds that Northgate violated its regulatory obligations under Sections 251 and 252 by refusing to provide interconnection and colocation access at the 14 Disputed Facilities, the scope and nature of the FCC's remedial order may directly affect the relief available in this Court. An FCC order directing Northgate to provide access on specified terms and conditions could moot or substantially narrow Ridgepoint's claims for injunctive relief in this action. The FCC's findings regarding the scope and nature of any violation would also bear on the damages analysis, as Ridgepoint's claimed antitrust damages are predicated on the assumption that Northgate's refusal to deal was unlawful and caused Ridgepoint to lose profits it would otherwise have earned.
44. The FCC's characterization of the relevant competitive landscape and Northgate's market position within the regulatory framework will bear directly on market definition — a contested issue in this action. Ridgepoint's expert, Dr. Leonard Kuo of Cavendish University, has proffered a narrow market definition under which Northgate is alleged to hold approximately 68% of the relevant market. Northgate contends that the properly defined relevant market is substantially broader and that Northgate's market share within that properly defined market is approximately 31%. The FCC's analysis of the competitive conditions in the Mid-Atlantic fiber market — including the number and identity of competing carriers, the availability of alternative interconnection facilities, and the degree of competitive constraint on Northgate's pricing and access practices — will provide a factual and analytical foundation that is directly relevant to this Court's resolution of the market definition dispute.
45. In light of the foregoing, the resolution of the FCC Proceeding has the potential either to dispose of or to materially narrow the issues before this Court. Allowing the FCC to develop its factual record and issue its determination before this Court proceeds to discovery, dispositive motions, or trial will promote the efficient and informed resolution of the antitrust claims.
E. Status of the FCC Proceeding
46. As of the date of this declaration, March 6, 2023, the FCC Proceeding in Docket WC-23-0042 is in its early stages. Ridgepoint's FCC complaint was filed on February 7, 2023, less than one month before the date of this declaration. ALJ Fenwick has been assigned to the proceeding but has not yet issued a scheduling order establishing deadlines for responsive pleadings, discovery, or the evidentiary hearing. Northgate expects that ALJ Fenwick will issue such a scheduling order in the coming weeks.
47. Northgate expects to file its Answer and Affirmative Defenses in the FCC Proceeding in accordance with the schedule to be established by ALJ Fenwick, and anticipates doing so shortly after the scheduling order is issued. Northgate intends to fully participate in the FCC Proceeding and to contest both the factual allegations and the legal theories advanced by Ridgepoint in that forum.
48. Based on my experience with FCC adjudicatory proceedings, I expect that the FCC Proceeding will involve a full evidentiary hearing before ALJ Fenwick, including witness testimony from both fact and expert witnesses, the submission and exchange of documentary evidence, and comprehensive briefing on the legal and regulatory issues. This process will develop a detailed factual record on the very regulatory and competitive issues that are at the heart of this case. The FCC's proceedings are designed to provide a thorough and expert evaluation of precisely the types of interconnection, network access, and competitive dynamics questions that are central to the matters before this Court.
VII. RISK OF INCONSISTENT OUTCOMES
49. If both the FCC Proceeding and this district court action continue simultaneously on parallel tracks, there is a substantial risk of inconsistent factual findings and legal conclusions arising from the two proceedings. This risk is not hypothetical or speculative — it flows directly from the extensive overlap between the two proceedings, as described in detail in Section VI.B above.
50. The FCC may reach conclusions about Northgate's interconnection obligations — including whether Northgate is subject to Section 251 obligations at the 14 Disputed Facilities, and if so, whether Northgate has violated those obligations — that are inconsistent with this Court's findings on overlapping issues. For example, the FCC may find that the Wholesale Access Policy is commercially reasonable and consistent with regulatory requirements, while this Court might simultaneously conclude that the same policy constitutes anticompetitive conduct under the Sherman Act. Alternatively, the FCC may find that Northgate's capacity constraints at the 14 Disputed Facilities are genuine and provide a valid justification for denying colocation requests, while this Court might reach a contrary conclusion on the same factual question based on a different evidentiary record and analytical framework.
51. Similarly, the FCC's analysis of the competitive dynamics of the Mid-Atlantic fiber market — including questions of market definition, market share, and the availability of competitive alternatives — may differ from this Court's analysis of those same issues in the antitrust context. The risk that two governmental bodies will reach conflicting conclusions on the same factual and economic questions, based on overlapping but not identical records, is a significant concern that militates strongly in favor of staying this action pending the FCC's resolution of Docket WC-23-0042.
52. A stay will avoid this risk and promote consistency between regulatory and judicial determinations. The Supreme Court has long recognized that considerations of wise judicial administration counsel in favor of staying district court proceedings where a specialized federal agency is actively considering the same or closely related issues. See, e.g., Reiter v. Cooper, 507 U.S. 258, 268–69 (1993); Primary Jurisdiction Doctrine as discussed in Far East Conference v. United States, 342 U.S. 570, 574–75 (1952). The Fourth Circuit has similarly recognized the importance of avoiding inconsistent outcomes between regulatory and judicial proceedings, particularly where, as here, a specialized agency possesses expertise over the subject matter at issue and is actively engaged in a proceeding that may resolve the factual and legal questions underlying the district court action.
VIII. PREJUDICE CONSIDERATIONS
53. A stay of this action pending resolution of the FCC Proceeding will not prejudice Ridgepoint. Ridgepoint itself initiated the FCC Proceeding on February 7, 2023, by filing the complaint in Docket WC-23-0042. Having voluntarily invoked the FCC's jurisdiction over the interconnection and access issues that lie at the heart of this case, Ridgepoint cannot credibly argue that the pendency of the FCC Proceeding — or a stay of this action to allow the FCC to do its work — causes Ridgepoint undue harm. To the contrary, a stay would merely allow the regulatory process that Ridgepoint itself set in motion to proceed to its natural conclusion before this Court takes up the overlapping antitrust claims.
54. Ridgepoint's claimed damages in this action are monetary in nature. Ridgepoint seeks $127 million in alleged lost profits over a projected five-year period spanning 2022 through 2027, which Ridgepoint proposes to treble to $381 million under Section 4 of the Clayton Act, 15 U.S.C. § 15. These monetary damages, if ultimately proven, will remain fully available to Ridgepoint if and when the stay is lifted. A temporary stay does not extinguish or diminish Ridgepoint's right to pursue its damages claims; it merely defers the litigation of those claims until the FCC has had the opportunity to address the regulatory issues that may significantly inform — or dispose of — the antitrust analysis. There is no suggestion that Northgate is at risk of insolvency or that a delay in this litigation would jeopardize Ridgepoint's ability to collect any judgment that might ultimately be entered.
55. Ridgepoint continues to operate as a going concern in the Mid-Atlantic telecommunications market. Ridgepoint owns and leases approximately 6,200 route-miles of fiber-optic infrastructure and continues to serve enterprise and wholesale customers throughout the region. Ridgepoint's business operations are not dependent on access to the 14 Disputed Facilities, as Ridgepoint has never had colocation or interconnection arrangements at those facilities and has operated its business without such access for the entirety of its existence. Additionally, Ridgepoint continues to occupy the three existing colocation spaces in northern Virginia under the month-to-month holdover arrangement described in Section V above, and continues to interconnect with the Northgate network at those locations.
56. Northgate, in turn, would be prejudiced by the burden and expense of litigating two parallel proceedings on overlapping factual and legal issues. The total defense costs incurred by Northgate in connection with this district court litigation alone have already been substantial, encompassing attorneys' fees, expert consultant engagements, document collection and review, and internal resource expenditures. The prospect of simultaneously litigating the same core issues before both this Court and the FCC would impose duplicative costs and burdens on Northgate, consume the time and attention of Northgate personnel who are witnesses or custodians in both proceedings, and create the risk that Northgate's positions in one forum could be used against it in the other — notwithstanding the differences in the applicable legal standards. A stay would eliminate these prejudicial burdens and allow both parties to focus their resources on the FCC Proceeding, where the regulatory questions that underpin the antitrust analysis can be resolved by the agency best equipped to address them.
IX. CONCLUSION
57. For all of the foregoing reasons, the FCC Proceeding in Docket WC-23-0042 will address the same factual and regulatory issues that lie at the heart of Ridgepoint's Section 2 Sherman Act claim in this Court. The FCC's inquiry will encompass the same 14 Disputed Facilities, the same Wholesale Access Policy, the same capacity constraint evidence, the same prior course of dealing, and the same competitive dynamics that are central to the antitrust analysis.
58. The FCC possesses specialized expertise over the interconnection obligations, network access rules, and competitive conditions at issue. Congress specifically entrusted the FCC with the administration of the interconnection framework under Sections 251 and 252 of the Communications Act, and the FCC has developed extensive experience and a substantial body of precedent in adjudicating precisely the types of disputes presented in Docket WC-23-0042.
59. Resolution of the FCC Proceeding may be dispositive of, or at a minimum materially inform, the antitrust issues before this Court — including the critical questions of whether Northgate had a duty to deal, whether the Wholesale Access Policy is commercially reasonable, and how the relevant market should be defined.
60. A stay pending resolution of the FCC Proceeding will promote judicial economy by avoiding duplicative proceedings, will avoid the risk of inconsistent factual findings and legal conclusions, and will not prejudice either party. Ridgepoint's monetary damages claims will remain fully available when the stay is lifted, and Ridgepoint's ongoing operations in the Mid-Atlantic market will not be materially affected by a temporary stay.
61. I respectfully request that the Court grant Defendants' Motion to Stay.
ATTESTATION
I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.
Executed at Tysons Corner, Virginia, on this 6th day of March, 2023.
________________________________________
Patrick Salazar Chief Regulatory Officer Northgate Telecommunications PLC
CERTIFICATE OF SERVICE
I hereby certify that on this 6th day of March, 2023, I caused the foregoing Declaration of Patrick Salazar in Support of Defendants' Motion to Stay Pending Resolution of FCC Proceeding to be served on all counsel of record via the Court's CM/ECF electronic filing system, which will send a Notice of Electronic Filing to the following:
Victoria Hargrove, Esq. Daniel Stoyanov, Esq. HARGROVE, WINSLOW & BURKE LLP 900 17th Street NW, Suite 600 Washington, D.C. 20006 Telephone: (202) 555-4100 Facsimile: (202) 555-4101
Email: vhargrove@hwblaw.com
Email: dstoyanov@hwblaw.com
Counsel for Plaintiff Ridgepoint Communications Inc.
________________________________________
Elaine Forsythe, Esq. CALDERWOOD & HARKNESS LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-7800 Facsimile: (202) 555-7801
Email: eforsythe@calderwoodharkness.com
Counsel for Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.
RIDGEPOINT COMMUNICATIONS INC.,
Plaintiff, | Civil Action No. 1:22-cv-01487-CMW
v.
NORTHGATE NETWORKS AMERICA INC. and NORTHGATE TELECOMMUNICATIONS PLC,
Defendants.