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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6)

Filed: November 14, 2022

Elaine Forsythe (VSB No. 48217) Howard Bellamy (admitted pro hac vice) Aaron Liu (VSB No. 93054) Monica Reyes (VSB No. 87621) CALDERWOOD & HARKNESS LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-4100

450 Lexington Avenue, 35th Floor New York, NY 10017 Telephone: (212) 555-7800

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

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TABLE OF AUTHORITIES

Cases

Statutes and Regulations

Secondary Authorities

PRELIMINARY STATEMENT

This is a private antitrust action brought by Plaintiff Ridgepoint Communications Inc. ("Ridgepoint" or "Plaintiff"), a regional competitive local exchange carrier ("CLEC"), against Defendants Northgate Telecommunications PLC ("Northgate") and its wholly owned U.S. subsidiary, Northgate Networks America Inc. ("NNA") (collectively, "Defendants" or "Northgate"). Ridgepoint asserts a single count of monopolization under Section 2 of the Sherman Act, 15 U.S.C. § 2, premised upon the theory that Northgate's decision not to grant Ridgepoint interconnection and physical colocation access at fourteen specific Northgate central-office and meet-me-room facilities in the Mid-Atlantic region constitutes an unlawful refusal to deal.

The gravamen of Ridgepoint's Complaint is straightforward: Ridgepoint wants access to Northgate's privately owned facilities, Northgate has declined to provide that access, and Ridgepoint asks this Court to compel Northgate to open its doors. The Sherman Act imposes no such obligation. Under controlling Supreme Court precedent — most importantly, Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), and Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) — a firm's unilateral refusal to deal with a competitor gives rise to antitrust liability, if at all, only in the most extraordinary circumstances. As the Court explained in Trinko, refusal-to-deal claims occupy "at or near the outer boundary of § 2 liability." 540 U.S. at 409. Those extraordinary circumstances are not present here.

Ridgepoint's Complaint fails on each of the essential elements required to state a Section 2 refusal-to-deal claim. First, the Complaint does not allege — because it cannot allege — a prior voluntary course of dealing at any of the fourteen disputed facilities. The only prior contractual relationship between the parties was a Master Interconnection Agreement covering three entirely different facilities in northern Virginia, and that agreement expired by its own terms on June 14, 2020. The fourteen facilities identified in the Complaint are facilities at which Ridgepoint has never had colocation or interconnection access of any kind. The absence of a prior course of dealing at the relevant facilities is dispositive under Aspen Skiing and its progeny.

Second, Northgate's Wholesale Access Policy ("WAP"), adopted in January 2020 — more than a year before Ridgepoint's first interconnection request — is a commercially reasonable, facially neutral internal policy that provides a legitimate business justification for the access decisions at issue. The WAP applies uniformly to all third-party colocation requests and sets a minimum annual revenue commitment of $5 million, a threshold that Ridgepoint, at $1.8 million in annual spend, does not approach.

Third, the Complaint does not plausibly allege that Northgate sacrificed short-term profits in order to harm Ridgepoint. To the contrary, the Complaint's own allegations reveal that Northgate's facilities operate at or above 85% capacity utilization, making it economically rational — not anticompetitive — for Northgate to reserve scarce facility space for higher-value wholesale partners rather than accommodate a below-threshold customer.

Fourth, the Complaint defines the relevant market so narrowly as to be implausible on its face. By artificially restricting the product market to "last-mile enterprise fiber-optic transport services" of 1 Gbps and above — while excluding obvious substitutes such as cable broadband, fixed wireless access, and wholesale ethernet services — Ridgepoint has gerrymandered a market definition designed to inflate Northgate's market share from a non-monopolistic 31% to an artificially elevated 68%.

Additionally, the existence of comprehensive regulatory remedies under Sections 251 and 252 of the Communications Act — remedies specifically designed to address interconnection disputes of this kind — further undermines any justification for extending antitrust liability. Indeed, Ridgepoint has itself filed an FCC complaint raising the identical interconnection issues, confirming that the regulatory pathway is both available and being pursued.

For each and all of these reasons, Northgate respectfully requests that the Court dismiss Ridgepoint's Complaint with prejudice under Federal Rule of Civil Procedure 12(b)(6).

STATEMENT OF FACTS

The following facts are drawn from the allegations set forth in Ridgepoint's Complaint (ECF No. 1), accepted as true solely for purposes of this motion. Where indicated, Defendants also reference documents incorporated by reference into the Complaint, including the Master Interconnection Agreement, the Wholesale Access Policy, and publicly available filings.

A. The Parties

1. Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.

Defendant Northgate Telecommunications PLC is a public limited company organized under the laws of England and Wales, with its principal executive offices located at 14 Broadwall Lane, London SE1 9PQ, United Kingdom. Northgate's American Depositary Receipts are listed on the Nasdaq Global Select Market under the ticker symbol "NTP." Northgate is a global provider of fiber-optic telecommunications infrastructure, enterprise connectivity services, and cloud-based network management platforms.

Defendant Northgate Networks America Inc. ("NNA") is a corporation organized under the laws of Delaware, with its principal executive offices located at 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, Virginia 22182. NNA is a wholly owned subsidiary of Northgate and serves as the primary operating entity for Northgate's business in the United States. NNA owns and operates approximately 42,000 route-miles of fiber-optic backbone and metropolitan-ring infrastructure across eighteen U.S. states, with a primary concentration along the eastern seaboard from Maine to Florida. In addition to its fiber-optic transport business, NNA offers enterprise cloud-connectivity services and SaaS-based network management platforms marketed under the "NorthgateOS™" brand.

For fiscal year 2022, Northgate reported consolidated revenue of £4.87 billion (approximately $5.96 billion at prevailing exchange rates). Of this total, U.S. revenue attributable to NNA was approximately $2.41 billion, representing approximately 40.4% of consolidated revenue. As of September 2022, Northgate's aggregate market capitalization was approximately $11.3 billion. Northgate's Chief Executive Officer is Sir Malcolm Prentice, KBE. NNA's U.S. President is Diane Okoro, and its Chief Regulatory Officer is Patrick Salazar.

Northgate and NNA compete in a dynamic and intensely competitive telecommunications market against numerous well-capitalized providers, including — among many others — Camberwell Enterprises, Ashgrove & Co., Ostrander Industries (formerly Kestrel Holdings), Fenmore Partners LLC, Stonefield Corporation, and Northgate Holdings. The Mid-Atlantic region alone is served by more than forty facilities-based telecommunications carriers, a fact that the Complaint conspicuously ignores.

2. Plaintiff Ridgepoint Communications Inc.

Plaintiff Ridgepoint Communications Inc. is a corporation organized under the laws of Delaware, with its principal executive offices located at 3500 Market Street, Suite 700, Philadelphia, Pennsylvania 19104. Ridgepoint operates as a competitive local exchange carrier ("CLEC") and enterprise broadband provider in Pennsylvania, New Jersey, Delaware, Maryland, and Virginia. Ridgepoint owns and leases approximately 6,200 route-miles of fiber-optic infrastructure across these five states.

For fiscal year 2022, Ridgepoint reported revenue of approximately $387 million. It employs approximately 1,450 individuals. Ridgepoint's Chief Executive Officer and Founder is Gregory Trent.

Ridgepoint is privately held. Since a leveraged buyout completed in November 2018 and valued at approximately $510 million, approximately 78% of Ridgepoint's equity has been owned by Caravel Capital Partners LP, a mid-market private equity fund based at 1700 JFK Boulevard, Suite 2900, Philadelphia, Pennsylvania 19103. The Trent family retains the remaining 22% equity stake.

Ridgepoint is represented in this action by Hargrove, Winslow & Burke LLP of Washington, D.C. and Philadelphia, with Victoria Hargrove serving as lead partner. Upon information and belief, counsel's fee arrangement includes a partial contingency component consisting of a reduced hourly rate plus 20% of any monetary recovery — a structure that may bear upon the economic incentives underlying this litigation. Ridgepoint is not without resources, nor is it without competitive alternatives. As discussed below, Ridgepoint itself operates thousands of route-miles of fiber-optic infrastructure throughout the very corridor in which it alleges Northgate holds a monopoly.

B. Northgate's Wholesale Access Policy

In January 2020, Northgate adopted the Wholesale Access Policy ("WAP"), an internal business policy applicable across NNA's U.S. facilities. The WAP was developed by Northgate's commercial strategy and facilities management teams in response to increasing demand for colocation space at NNA's central-office and meet-me-room facilities, many of which had reached or were approaching capacity limits.

Under the WAP, third-party physical colocation at Northgate facilities is restricted to existing wholesale partners that meet a minimum annual revenue commitment of $5 million per year. This threshold was established based on Northgate's internal analysis of the revenue levels necessary to justify the capital expenditures and operational costs associated with accommodating third-party colocation, including power provisioning, cooling, physical security, cross-connect management, and ongoing maintenance.

The WAP was adopted as a commercially reasonable measure to optimize limited facility capacity for higher-value wholesale relationships. It was developed in the context of Northgate's broader facility planning and capital allocation processes, which included a comprehensive assessment of capacity utilization across NNA's U.S. facility portfolio. The WAP was not adopted in response to any request from Ridgepoint, nor was it directed at Ridgepoint or any other specific carrier. It was a generally applicable policy, adopted in January 2020, more than fourteen months before Ridgepoint submitted its first interconnection request in March 2021.

The Complaint acknowledges the existence of the WAP but alleges, in wholly conclusory fashion, that it was adopted "specifically to exclude competitive carriers from the Mid-Atlantic market." Compl. ¶ 47. This allegation is unsupported by any factual matter and is contradicted by the timeline of events and the facially neutral terms of the policy itself.

C. The Prior Master Interconnection Agreement and Its Expiration

On June 15, 2015, Northgate and Ridgepoint entered into a Master Interconnection Agreement (the "MIA"). The MIA granted Ridgepoint physical colocation and interconnection access at three specifically identified NNA facilities located in northern Virginia. The MIA was a negotiated commercial agreement with a defined five-year term, and it expired by its own terms on June 14, 2020.

Following the expiration of the MIA, Northgate declined to renew the agreement. Northgate communicated its decision to Ridgepoint in a letter dated May 8, 2020, from Patrick Salazar, Northgate's Chief Regulatory Officer, to Gregory Trent, Ridgepoint's CEO. The letter cited the newly adopted WAP and noted that Ridgepoint's aggregate annual spend with Northgate — approximately $1.8 million in fiscal year 2021 — fell well below the WAP's $5 million minimum annual revenue commitment threshold.

Rather than immediately terminate Ridgepoint's occupancy at the three MIA facilities, Northgate permitted Ridgepoint to continue occupying the existing colocation spaces under a month-to-month holdover arrangement. Under the holdover terms, Ridgepoint pays a holdover rate of $14,400 per month per facility, representing 120% of the prior contractual rate of $12,000 per month — a holdover premium of $2,400 per month per facility, or $7,200 per month in aggregate ($86,400 annually). Ridgepoint continues to occupy these three facilities under this holdover arrangement as of the date of this filing.

Critically — and this point cannot be overstated — none of the fourteen facilities at issue in this litigation are among the three northern Virginia facilities covered by the expired MIA. The MIA was a limited, site-specific contractual arrangement that, by its own terms, conferred no rights with respect to any Northgate facilities other than the three specifically identified therein. The Complaint does not allege otherwise; it simply seeks to extrapolate from a narrow, expired contract a generalized obligation to deal at entirely different locations. The law does not support such an extrapolation.

D. Ridgepoint's Interconnection and Colocation Requests

Between March 2021 and August 2022, Ridgepoint submitted interconnection and physical colocation requests to Northgate for fourteen specific NNA facilities located in the Philadelphia–Baltimore–Washington, D.C. corridor. The fourteen facilities are:

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

2. 1500 Spring Garden Street, Philadelphia, PA 19130

3. 100 Delancey Place, Cherry Hill, NJ 08034

4. 220 S. Warren Street, Trenton, NJ 08608

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

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

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

8. 9221 Corporate Boulevard, Rockville, MD 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, VA 20147

12. 21571 Beaumeade Circle, Ashburn, VA 20147

13. 1807 Michael Faraday Court, Reston, VA 20190

14. 8100 Boone Boulevard, Tysons Corner, VA 22182

Northgate declined each of these requests. In its written responses, Northgate cited three grounds: (a) capacity constraints at the specific facilities, all of which were operating at or above 85% capacity utilization at the time of the respective requests; (b) the absence of any prior course of dealing with Ridgepoint at those particular locations; and (c) Ridgepoint's failure to meet the WAP's $5 million minimum annual revenue commitment threshold. Each declination was documented in a written letter from NNA's commercial operations team to Ridgepoint's regulatory affairs department, with copies to Northgate's legal department.

E. Ridgepoint's Complaint

Ridgepoint filed its Complaint on September 19, 2022, asserting a single count under Section 2 of the Sherman Act, 15 U.S.C. § 2. The Complaint alleges that Northgate has monopolized the purported market for "last-mile enterprise fiber-optic transport services" in the Philadelphia–Baltimore–Washington, D.C. corridor through its refusal to grant Ridgepoint interconnection and colocation access at the fourteen facilities identified above.

The Complaint defines the relevant product market as "last-mile enterprise fiber-optic transport services (lit and dark fiber) with speeds of 1 Gbps and above, sold to enterprise and government customers." Compl. ¶ 62. Notably, this definition excludes cable broadband services, fixed wireless access, wholesale ethernet services, and other technologies routinely used by enterprise customers to obtain high-speed connectivity — all of which are readily available from multiple providers throughout the geographic area in question.

The Complaint defines the relevant geographic market as the "Philadelphia–Baltimore–Washington, D.C. metropolitan corridor," encompassing portions of Pennsylvania, New Jersey, Delaware, Maryland, Virginia, and the District of Columbia. Compl. ¶ 67.

Relying on the preliminary analysis of its economic expert, Dr. Leonard Kuo of Cavendish University, the Complaint alleges that Northgate holds a 68% share of this purported market. Compl. ¶ 71. However, as discussed below, this market share figure is entirely an artifact of the implausibly narrow market definition employed by Dr. Kuo.

The Complaint seeks $127 million in lost profits over a five-year projected period (2022–2027), which Ridgepoint trebles to $381 million under Section 4 of the Clayton Act, 15 U.S.C. § 15. Compl. ¶ 89. The Complaint also seeks permanent injunctive relief compelling Northgate to grant interconnection access at the fourteen facilities. Compl., Prayer for Relief ¶¶ 2–3.

LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint. Under this standard, a complaint must be dismissed unless it alleges "enough facts to state a claim to relief that is plausible on its face." Thackeray Corporation v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

The plausibility standard is not a "probability requirement," but it demands "more than a sheer possibility that a defendant has acted unlawfully." Id. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief." Id. (quoting Twombly, 550 U.S. at 557).

This plausibility standard applies with particular rigor in the antitrust context. In Twombly, which was itself an antitrust case, the Supreme Court cautioned that courts must ensure that antitrust claims rest on more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." 550 U.S. at 555. This heightened scrutiny reflects the reality that antitrust litigation imposes "enormous" Discovery costs on defendants and that "proceeding to antitrust discovery can be expensive." Id. at 558. The costs of antitrust discovery, combined with the treble-damages remedy available under the Clayton Act, create an in terrorem settlement dynamic that makes rigorous pleading-stage review essential.

In ruling on a motion to dismiss, the Court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. Iqbal, 556 U.S. at 678. The Court is not required, however, to accept legal conclusions, naked assertions, or conclusory statements devoid of further factual enhancement. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

Particularly relevant to the claims asserted here, the Supreme Court has long recognized that "as a general matter, the Sherman Act does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal." Trinko, 540 U.S. at 408 (quoting United States v. Colgate & Co., 250 U.S. 300, 307 (1919)). This fundamental principle of freedom to choose one's trading partners "has been a central part of the antitrust canon since at least 1919." Id. Any departure from this principle must be grounded in the extraordinary circumstances recognized in Aspen Skiing — circumstances that the Complaint here does not and cannot allege.

ARGUMENT

I. RIDGEPOINT FAILS TO STATE A REFUSAL-TO-DEAL CLAIM UNDER SECTION 2 OF THE SHERMAN ACT

A. The Legal Framework for Refusal-to-Deal Claims Under *Aspen Skiing* and *Trinko*

Section 2 of the Sherman Act prohibits monopolization, which requires proof of "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570–71 (1966). Within this framework, claims based upon a monopolist's unilateral refusal to deal with a competitor represent "at or near the outer boundary of § 2 liability." Trinko, 540 U.S. at 409.

The narrow doctrinal exception permitting antitrust liability for a refusal to deal derives from the Supreme Court's decision in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985). In Aspen Skiing, the Court upheld a jury verdict finding that the operator of three of four ski mountains in Aspen, Colorado, had violated Section 2 by refusing to continue a long-standing joint-ticketing arrangement with the operator of the fourth mountain. The Court emphasized several critical features of the arrangement: the parties had voluntarily cooperated in offering a joint multi-day lift ticket for years; the monopolist had terminated that arrangement despite its profitability; and the monopolist's conduct was not motivated by any legitimate business reason, but rather by a desire to harm its competitor. Id. at 601–11.

The essential elements of an Aspen Skiing refusal-to-deal claim, as refined by subsequent precedent, are: (i) a monopolist's termination of a prior voluntary and profitable course of dealing with a competitor; (ii) evidence suggesting a willingness to sacrifice short-term profits in order to achieve an anticompetitive end; and (iii) resulting harm to consumers. See Trinko, 540 U.S. at 408–10; Novell, Inc. v. Kestrel Partners LLC, 731 F.3d 1064, 1074–75 (10th Cir. 2013) (Gorsuch, J.). Each of these elements is essential, and the absence of any one is independently fatal to the claim.

In Trinko, the Supreme Court dramatically narrowed the scope of Aspen Skiing, declining to extend refusal-to-deal liability beyond the specific facts of that case. The Trinko Court observed that Aspen Skiing "is at or near the outer boundary of § 2 liability," and cautioned that "[t]he indeterminate conduct at issue — the defendant's unilateral refusal to deal with its rivals — is unlike the paradigmatic acts that constitute Sherman Act violations, such as price fixing and market allocation." 540 U.S. at 408–09. The Court emphasized that compelled dealing under the antitrust laws "may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities," thereby undermining the competitive process the antitrust laws are designed to protect. Id. at 407–08.

The Trinko Court expressly distinguished Aspen Skiing on the ground that the defendant in that case had terminated a preexisting, voluntary, and profitable relationship. The Court noted that in Trinko, "the complaint does not allege that Ashgrove & Co. voluntarily engaged in a course of dealing with its rivals, or would ever have done so absent statutory compulsion." Id. at 409. The absence of a prior voluntary course of dealing was central to the Court's holding.

Moreover, the Trinko Court emphasized that where a regulatory framework exists to address the challenged conduct, the justification for judicial intervention through the antitrust laws is diminished. Id. at 411–12. The existence of regulatory oversight "diminishes the likelihood that the [complained-of] conduct would result in the kind of harm antitrust law is designed to prevent." Id.

Courts of appeals have faithfully applied the Trinko framework, consistently requiring clear and well-pleaded allegations satisfying each element of the Aspen Skiing test before permitting a Section 2 refusal-to-deal claim to proceed past the pleading stage. See, e.g., Novell, 731 F.3d at 1074–75; Hicks v. PGA Tour, Inc., 897 F.3d 1157, 1168–69 (9th Cir. 2018); Morris Commc'ns Corp. v. PGA Tour, Inc., 364 F.3d 1288, 1295 (11th Cir. 2004). As Professors Areeda and Hovenkamp have observed, "a monopolist's decision not to cooperate with a rival has rarely, and should rarely, be held to violate the antitrust laws." Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 772a (4th ed. 2018). A firm — even a monopolist — "has no general duty to help its competitors." Id. ¶ 772b.

Against this demanding doctrinal backdrop, Ridgepoint's Complaint fails at every turn. The Complaint does not satisfy any of the elements required under Aspen Skiing and Trinko to state a plausible refusal-to-deal claim. Each independent failure provides sufficient ground for dismissal with prejudice.

B. There Was No Prior Voluntary Course of Dealing at the Fourteen Disputed Facilities

The single most critical fact in this case — and the fact that is alone dispositive of Ridgepoint's claim — is that Ridgepoint has never had interconnection or colocation access at any of the fourteen facilities that are the subject of its Complaint. The threshold requirement under Aspen Skiing is the termination of a prior voluntary and profitable course of dealing. Here, there is no prior dealing to terminate.

The Complaint attempts to sidestep this fatal deficiency by pointing to the parties' expired Master Interconnection Agreement. But the MIA covered only three facilities in northern Virginia — none of which are among the fourteen facilities identified in the Complaint. Compl. ¶¶ 37–42. The MIA was a limited, site-specific contractual arrangement negotiated and executed in June 2015, with a defined five-year term that expired by its own terms on June 14, 2020. By its express language, the MIA conferred no rights with respect to any Northgate facilities other than the three specifically identified therein.

Ridgepoint's attempt to bootstrap this narrow, expired agreement into a generalized obligation to grant access at fourteen entirely different facilities located throughout a multi-state corridor is legally and factually unfounded. Nothing in Aspen Skiing or any subsequent decision suggests that a course of dealing at specific identified locations creates an open-ended obligation to deal at different locations. To the contrary, the Aspen Skiing analysis is inherently fact-specific: the relevant question is whether the monopolist terminated a prior course of dealing with respect to the specific product, service, or facility at issue. See Trinko, 540 U.S. at 409 (emphasizing the absence of a "voluntar[y] course of dealing" as to the specific service at issue); Covad Commc'ns Co. v. Thackeray Corporation, 398 F.3d 666, 673 (D.C. Cir. 2005) (examining whether there was a prior course of dealing with respect to the particular interconnection access at issue).

The Complaint is devoid of any factual allegation that Northgate ever voluntarily provided Ridgepoint with colocation at any of the fourteen facilities, or that Northgate previously dealt with Ridgepoint on comparable terms at those locations. Indeed, the Complaint does not allege that Ridgepoint ever even requested access to any of these fourteen facilities prior to March 2021 — more than five years into the parties' relationship and more than a year after the WAP was adopted. The fourteen facilities are new facilities — new to the relationship between these parties — at which no dealing has ever occurred.

Moreover, the month-to-month holdover arrangement at the three MIA facilities further demonstrates that Northgate has not cut off Ridgepoint entirely. Despite the expiration of the MIA and Ridgepoint's failure to meet the WAP threshold, Northgate has permitted Ridgepoint to continue occupying its existing colocation spaces at the three northern Virginia locations, albeit at a holdover rate reflecting a 20% premium over the prior contractual rate. This continued accommodation is the opposite of the conduct condemned in Aspen Skiing, where the monopolist refused to sell its competitor lift tickets even at retail prices. Aspen Skiing, 472 U.S. at 593. Here, Northgate continues to transact with Ridgepoint at the sites where the parties have an existing relationship, while declining to extend that relationship to new locations where no prior dealing exists.

Courts have consistently held that the absence of a prior course of dealing at the specific facilities or for the specific services at issue is fatal to an Aspen Skiing claim. In MetroNet Services Corp. v. Qwest Corp., 383 F.3d 1124, 1132 (9th Cir. 2004), the Ninth Circuit held that where a CLEC sought interconnection access at facilities where it had never previously been collocated, the absence of a prior course of dealing precluded a refusal-to-deal claim. Similarly, in Covad, 398 F.3d at 673, the D.C. Circuit emphasized that the Aspen Skiing framework requires the termination of a specific pre-existing relationship — not merely a refusal to create a new one. As the D.C. Circuit explained, "[t]he antitrust laws do not require a monopolist to cooperate with its rivals," and a refusal to deal "does not create liability where the parties had no pre-existing business relationship." Id.

Ridgepoint cannot transform a request for new access into a claim of terminated access. The Complaint acknowledges that the prior MIA covered only three specific facilities — none of which are at issue here. This concession is dispositive. Because there was no prior voluntary course of dealing at the fourteen disputed facilities, the Aspen Skiing threshold requirement is not met, and the Complaint must be dismissed.

C. Northgate's Wholesale Access Policy Is a Legitimate Business Justification

Even if Ridgepoint could somehow satisfy the threshold requirement of a prior course of dealing — which it cannot — the Complaint would still fail because Northgate has an independently sufficient legitimate business justification for its access decisions: the Wholesale Access Policy.

1. The WAP Is a Facially Neutral, Commercially Reasonable Policy. The WAP was adopted in January 2020, more than fourteen months before Ridgepoint submitted its first interconnection request in March 2021. It is a generally applicable business policy that applies uniformly to all third-party colocation requests across NNA's U.S. facilities. The WAP is not directed at Ridgepoint specifically, and the Complaint does not allege that the WAP treats Ridgepoint differently from any other similarly situated carrier.

The $5 million annual revenue commitment threshold reflects Northgate's legitimate interest in reserving finite facility capacity for higher-value wholesale partnerships. The Complaint itself acknowledges that the fourteen disputed facilities were operating at or above 85% capacity utilization at the time of Ridgepoint's requests. Compl. ¶ 56. Under these circumstances, Northgate's decision to allocate scarce facility space to partners generating at least $5 million in annual revenue is a textbook example of commercially reasonable resource allocation. A firm confronting binding capacity constraints acts rationally when it prioritizes customers that generate the greatest return on its limited available resources.

Ridgepoint's fiscal year 2021 annual spend with Northgate was approximately $1.8 million — well below the $5 million threshold. The Complaint does not allege that Ridgepoint was willing to commit to $5 million in annual revenue, offered to do so and was rebuffed, or took any other step to meet the WAP's requirements. Indeed, the Complaint implicitly concedes that Ridgepoint does not and cannot meet the WAP threshold, while arguing that the threshold itself is anticompetitive. This argument fails as a matter of law. A monopolist's decision to impose minimum purchase requirements — particularly in the context of capacity-constrained facilities — is precisely the kind of legitimate business conduct that the antitrust laws protect rather than condemn.

2. Ridgepoint's Allegation of Pretext Is Conclusory and Implausible. The Complaint's sole attempt to undermine the legitimacy of the WAP is the allegation that it was adopted "specifically to exclude competitive carriers from the Mid-Atlantic market." Compl. ¶ 47. This allegation is the very definition of a "threadbare recital" that Iqbal instructs courts to disregard. 556 U.S. at 678. It is a naked conclusion of anticompetitive intent, unsupported by any particular facts from which such intent could reasonably be inferred.

The timeline of events affirmatively contradicts the pretext allegation. The WAP was adopted in January 2020. Ridgepoint's interconnection requests did not begin until March 2021, over fourteen months later. The Complaint does not allege that Northgate was aware of, or anticipating, any specific interconnection request from Ridgepoint at the time the WAP was adopted. Nor does the Complaint allege that any Northgate employee or officer made statements suggesting an intent to target Ridgepoint or other CLECs. The Complaint offers no internal communications, board minutes, memoranda, or other documentary evidence suggesting that the WAP was adopted for anticompetitive purposes. It relies entirely on the bare assertion of pretext, which is precisely the kind of conclusory allegation that Iqbal and Twombly hold insufficient to survive a motion to dismiss.

Under Iqbal, the Court must first identify the conclusory allegations in the Complaint and set them aside, then evaluate whether the remaining well-pleaded factual allegations state a plausible claim. 556 U.S. at 679. When the conclusory allegation of pretext is set aside, what remains is a facially neutral business policy adopted more than a year before any request from Ridgepoint, applied uniformly across Northgate's entire U.S. facility portfolio, and justified by documented capacity constraints. These facts support a legitimate business justification, not an anticompetitive scheme.

Even under the Aspen Skiing framework, a defendant's proffer of a legitimate business justification is sufficient to rebut an inference of anticompetitive intent absent well-pleaded facts demonstrating that the justification is pretextual. See Novell, 731 F.3d at 1075 (holding that a legitimate business justification defeats a refusal-to-deal claim unless the plaintiff can show the justification is a pretext). Here, the WAP's commercial rationale — capacity management and revenue optimization — is not merely plausible; it is the obvious and natural explanation for the challenged conduct. There is nothing suspicious about a firm with capacity-constrained facilities setting minimum revenue thresholds for third-party colocation. To the contrary, it would be commercially irrational not to do so.

3. The Refusal Did Not Sacrifice Short-Term Profits. A hallmark of the Aspen Skiing doctrine is the requirement that the monopolist have foregone short-term profits in order to inflict competitive harm. This "profit sacrifice" test serves as a critical screen to distinguish legitimately competitive behavior from conduct motivated by anticompetitive purpose. See Pac. Bell Tel. Co. v. Greaves Corporation, 555 U.S. 438, 451 (2009); Novell, 731 F.3d at 1075. Where a firm's refusal to deal is profitable — or at least economically rational — in the short term, the refusal cannot support an inference of anticompetitive intent.

Northgate did not sacrifice profits by declining to provide Ridgepoint with colocation at the fourteen facilities. To the contrary, Northgate's capacity constraints — all fourteen facilities operating at or above 85% utilization — mean that allocating space to Ridgepoint, which fell far below the WAP revenue threshold, would have been less profitable than continuing to serve existing wholesale customers that meet the $5 million commitment. In economic terms, the opportunity cost of accommodating Ridgepoint at these capacity-constrained facilities would have exceeded the revenue Ridgepoint was prepared to generate. Declining to serve a below-threshold customer in favor of higher-revenue customers at capacity-constrained facilities is profit-maximizing, not profit-sacrificing.

The Complaint does not allege, nor could it plausibly allege, that Northgate forwent profitable dealing with Ridgepoint. Ridgepoint's $1.8 million annual spend is barely one-third of the $5 million minimum threshold. The Complaint does not allege that the fourteen facilities had available capacity that was going unused, or that Northgate declined profitable arrangements with Ridgepoint in favor of leaving space vacant. Such an allegation would be necessary to invoke the profit-sacrifice rationale of Aspen Skiing, and no such allegation appears in the Complaint.

The contrast with Aspen Skiing is instructive. In that case, the monopolist refused to sell lift tickets to its competitor even at retail prices — a refusal that was economically irrational and could only be explained by a desire to harm the competitor. 472 U.S. at 593. Here, Northgate's refusal to accommodate a below-threshold customer at capacity-constrained facilities is economically rational and explicable without reference to any anticompetitive motive. The profit-sacrifice requirement is not satisfied, and this independent failure provides an additional basis for dismissal.

II. THE COMPLAINT DEFINES THE RELEVANT MARKET IN AN IMPLAUSIBLY NARROW MANNER

A. The Legal Standard for Market Definition at the Pleading Stage

A plaintiff asserting a Section 2 monopolization claim must plausibly allege a relevant product market and a relevant geographic market. See Twombly, 550 U.S. at 556. Market definition is not merely a technical exercise; it is "the foundation of any monopolization claim, because without a coherently defined market there is no way to evaluate the defendant's alleged market power." Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430, 436 (3d Cir. 1997).

While courts afford plaintiffs some degree of leeway in defining the relevant market at the pleading stage, dismissal is appropriate where the proposed market definition is "facially unsustainable" or where the complaint's own allegations undermine the proffered market boundaries. See Todd v. Severin Corporation, 275 F.3d 191, 199–200 (2d Cir. 2001) (noting that a market definition must be plausible); Queen City Pizza, 124 F.3d at 436–37 (affirming dismissal where the proposed market was "legally insufficient"); Calderon Industries v. Image Technical Services, Inc., 504 U.S. 451, 469 n.15 (1992) (observing that market definition requires identification of the relevant universe of products and services that are reasonably interchangeable). Importantly, a complaint's market definition need not be proven at the pleading stage, but it must be plausible — that is, it must not exclude "obvious alternative[s]" that would significantly alter the competitive analysis. Twombly, 550 U.S. at 556 n.4.

B. The Proposed Product Market Excludes Obvious Substitutes

Ridgepoint defines the relevant product market as "last-mile enterprise fiber-optic transport services (lit and dark fiber) with speeds of 1 Gbps and above, sold to enterprise and government customers." Compl. ¶ 62. This definition suffers from a fundamental and fatal deficiency: it excludes obvious competitive substitutes that enterprise and government customers routinely use to obtain high-speed connectivity.

The Complaint's product market definition is artificially narrow in at least three respects.

First, it excludes cable broadband services. Major cable operators, including Northpoint Enterprises and Brightwater Partners LLC, offer enterprise-grade broadband services in the Philadelphia–Baltimore–Washington, D.C. corridor at speeds exceeding 1 Gbps. These services are widely used by enterprise customers as substitutes for — or complements to — fiber-optic transport. The Complaint offers no explanation for excluding cable broadband, and no basis for concluding that enterprise customers view cable broadband as a non-substitute for fiber-optic transport at comparable speeds. In fact, the ongoing convergence of cable and fiber technologies — including the deployment of DOCSIS 4.0 technology capable of symmetric multi-gigabit speeds — has further eroded any meaningful distinction between cable and fiber-based enterprise connectivity services.

Second, the Complaint excludes fixed wireless access ("FWA") services. Providers such as Harborline & Co., Ashgrove & Co. (through its 5G Business Internet product), and numerous specialized wireless ISPs offer fixed wireless connectivity to enterprise customers in the Mid-Atlantic region at speeds of 1 Gbps and above. Fixed wireless access is an increasingly significant competitive alternative to last-mile fiber, particularly for enterprise customers that value rapid deployment and flexibility. The Complaint's exclusion of FWA services from the product market is unjustifiable.

Third, the Complaint excludes wholesale ethernet services. Multiple carriers in the Mid-Atlantic region — including Northgate Holdings, Cobalt Ridge Group, and Crestline Industries — offer wholesale ethernet transport services at speeds comparable to or exceeding 1 Gbps. Enterprise customers routinely procure ethernet transport as an alternative or supplement to dedicated fiber-optic facilities. The exclusion of wholesale ethernet from the product market is arbitrary and serves only to inflate Northgate's apparent market share.

The Complaint offers no explanation for excluding these alternatives. Enterprise customers routinely procure connectivity from cable operators, fixed wireless providers, and ethernet wholesalers, and regularly substitute among these options based on price, capacity, availability, and deployment timelines. The failure to account for these alternatives renders the Complaint's product market definition facially unsustainable.

Courts have consistently rejected narrowly defined telecommunications markets that artificially exclude competitive alternatives in order to inflate a defendant's apparent market share. See, e.g., Westvale Holdings. v. Pemberton Corporation, 501 F.3d 297, 307 (3d Cir. 2007) (emphasizing that market definition must account for "all products reasonably interchangeable by consumers"); Geneva Pharms. Tech. Corp. v. Barr Labs., Inc., 386 F.3d 485, 496 (2d Cir. 2004) (holding that a market definition excluding reasonable substitutes is "legally insufficient"). The U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines, while developed in the merger context, provide useful guidance: a relevant market should include all products to which "a significant percentage of buyers" would switch in response to a "small but significant and nontransitory increase in price." U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal Merger Guidelines § 4.1 (2010). The Complaint's product market definition fails this basic test.

The claimed 68% market share for Northgate — the figure generated by Dr. Kuo's "preliminary analysis" — is nothing more than an artifact of this implausibly narrow market definition. It is derived by limiting the market to fiber-only services and excluding cable, wireless, and ethernet alternatives that directly compete for the same enterprise customers. Under a properly defined market that includes these obvious substitutes, Northgate's share would be approximately 31% — far below the levels typically associated with monopoly power and far below the threshold necessary to support a plausible inference of market dominance. See Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993) (monopoly power requires a dominant share of the relevant market); Grinnell, 384 U.S. at 571 (finding monopoly power where the defendant held approximately 87% of the relevant market). A market share of approximately 31% is, by contrast, consistent with a competitive market — not a monopoly.

C. The Proposed Geographic Market Is Also Deficient

The Complaint's geographic market definition is similarly flawed. Ridgepoint defines the relevant geographic market as the "Philadelphia–Baltimore–Washington, D.C. metropolitan corridor," encompassing portions of six jurisdictions: Pennsylvania, New Jersey, Delaware, Maryland, Virginia, and the District of Columbia. Compl. ¶ 67.

This gerrymandered corridor is not a recognized economic or regulatory market. It is not a Metropolitan Statistical Area or Combined Statistical Area as defined by the U.S. Census Bureau. It does not correspond to any FCC-defined market area, LATA, or other standard telecommunications market boundary. Rather, the corridor appears to have been drawn specifically to encompass the geographic area where the fourteen disputed facilities are located while excluding adjacent regions where Ridgepoint faces robust competition and has ample access to alternative infrastructure.

The Complaint does not allege that customers located within this artificially drawn corridor cannot obtain comparable high-speed enterprise connectivity services from providers whose infrastructure lies outside the corridor boundaries. In fact, the corridor as defined encompasses one of the most densely served telecommunications markets in the United States, with extensive overlapping infrastructure owned and operated by dozens of facilities-based carriers. Enterprise customers in the Philadelphia–Baltimore–Washington, D.C. corridor are served by — among others — Camberwell Enterprises, Ashgrove & Co., Ostrander Industries, Northpoint Enterprises, Fenmore Partners LLC, Stonefield Corporation, Northgate Holdings, Cobalt Ridge Group, Crestline Industries, and numerous regional and local providers. The notion that Northgate holds monopoly power in this intensely competitive geography strains credulity.

Furthermore, Ridgepoint itself operates approximately 6,200 route-miles of owned and leased fiber-optic infrastructure — much of it within this very corridor. Compl. ¶ 14. Ridgepoint's own infrastructure demonstrates that it is not an excluded competitor desperately seeking entry into a foreclosed market; it is an established participant with substantial infrastructure of its own, seeking to expand by obtaining access to Northgate's particular facilities. The existence of Ridgepoint's own extensive infrastructure within the alleged monopoly market undermines any claim that Northgate is an indispensable monopolist within this geography.

D. Without a Plausible Relevant Market, the Monopoly Power Element Fails

Monopoly power — defined as "the power to control prices or exclude competition" within a relevant market, Grinnell, 384 U.S. at 571 — is an essential element of a Section 2 claim. The plaintiff must plausibly allege both a relevant market and that the defendant possesses monopoly power within that market. Spectrum Sports, 506 U.S. at 455–56.

As demonstrated above, the Complaint's relevant market definition is implausible because it excludes obvious competitive substitutes in both the product and geographic dimensions. If the market is defined to include the cable broadband, fixed wireless, and wholesale ethernet services that the Complaint ignores — as any reasonable market definition would — Northgate's market share falls from the alleged 68% to approximately 31%. A market share of 31% is insufficient to support an inference of monopoly power as a matter of law.

Courts routinely dismiss Section 2 claims where the alleged market share fails to cross the threshold necessary to support a plausible inference of monopoly power. While there is no rigid numerical cutoff, courts have consistently held that market shares below 50% are generally insufficient to support an inference of monopoly power, and that shares significantly above 50% — typically 70% or greater — are ordinarily required for a finding of monopolization. See Grinnell, 384 U.S. at 571 (monopoly power found at approximately 87%); Eastman Kodak, 504 U.S. at 481 (discussing market share thresholds); Dunmore Industries, 501 F.3d at 307. At 31%, Northgate's share under a properly defined market falls well below any recognized threshold.

Because the Complaint fails to plausibly allege a relevant market in which Northgate possesses monopoly power, the monopoly-power element of the Section 2 claim fails, and the Complaint must be dismissed.

III. REGULATORY ALTERNATIVES FURTHER UNDERMINE RIDGEPOINT'S CLAIM

Even beyond the substantive deficiencies detailed above, the existence of comprehensive regulatory remedies designed to address the precise conduct at issue further counsels against extending antitrust liability in this case.

The Trinko Court specifically addressed the relationship between regulatory remedies and antitrust enforcement. The Court observed that where "a regulatory structure designed to deter and remedy anticompetitive harm" exists, "the additional benefit to competition provided by antitrust enforcement" is marginal. 540 U.S. at 412. This is because "[j]ust as regulatory context may serve as a factor undermining the need for antitrust enforcement," the existence of an alternative remedy "diminishes the likelihood that the [complained-of] conduct would result in the kind of harm antitrust law is designed to prevent." Id.

Sections 251 and 252 of the Communications Act of 1996 establish a comprehensive regulatory framework governing the interconnection obligations of telecommunications carriers. 47 U.S.C. §§ 251, 252. Section 251 imposes interconnection duties on incumbent local exchange carriers and provides procedures by which competitive carriers may request interconnection, including physical colocation, at reasonable and nondiscriminatory rates, terms, and conditions. Section 252 establishes a detailed process for the negotiation, mediation, and arbitration of interconnection agreements, with oversight by state public utility commissions and the FCC. These provisions provide precisely the kind of regulatory mechanism that the Trinko Court identified as diminishing the need for antitrust intervention.

Ridgepoint's Complaint is, at bottom, an interconnection dispute of the kind that Congress committed to regulatory resolution. Ridgepoint alleges that it was denied interconnection and colocation access at specific facilities on terms it deems unreasonable. This is precisely the kind of dispute that Sections 251 and 252 were designed to address. The availability of these regulatory remedies at the FCC and before state commissions further diminishes the justification for judicial intervention via the antitrust laws.

Notably, Ridgepoint has in fact filed an FCC complaint (Docket WC-23-0042, filed February 7, 2023) raising the identical interconnection issues at the heart of this litigation. While this FCC filing post-dates the present motion, it underscores a critical point: the regulatory pathway is not merely theoretically available — it is actively being pursued by Ridgepoint itself. The existence of this parallel regulatory proceeding confirms that there is no gap in the regulatory framework that would justify extending antitrust liability. To the contrary, permitting Ridgepoint to simultaneously pursue the same claims before the FCC and in this Court via a treble-damages antitrust action would create precisely the kind of duplicative and potentially inconsistent proceedings that the Trinko framework was designed to avoid.

As the Seventh Circuit observed in Goldwasser v. Ameritech Corp., 222 F.3d 390, 400 (7th Cir. 2000), "Congress is perfectly capable of identifying the circumstances under which a duty to cooperate with rivals arises, and courts should be reluctant to impose such duties on their own through the medium of antitrust law." The Communications Act has done precisely that, providing a tailored regulatory mechanism for resolving interconnection disputes. This Court should decline Ridgepoint's invitation to graft treble-damages antitrust liability onto conduct that is squarely within the purview of that regulatory scheme.

IV. RIDGEPOINT'S DAMAGES ALLEGATIONS ARE SPECULATIVE AND DO NOT SAVE THE COMPLAINT

Even setting aside the fatal substantive deficiencies described in Points I through III, Ridgepoint's damages claim further illustrates the implausibility of the Complaint.

Ridgepoint seeks $127 million in lost profits over a five-year projected period (2022–2027), trebled to $381 million under Section 4 of the Clayton Act. Compl. ¶ 89. This figure is based entirely on speculative projections of revenue that Ridgepoint might have earned had it obtained colocation at the fourteen disputed facilities and had it then successfully acquired enterprise and government customers at those locations.

The Complaint does not allege that Ridgepoint had any existing customers at any of the fourteen facilities. It does not allege that Ridgepoint had executed, or was in the process of negotiating, any customer contracts contingent upon obtaining colocation at those sites. It does not identify any specific demand that was frustrated by Northgate's refusal. Instead, the damages theory rests entirely on a chain of hypothetical contingencies: that Ridgepoint would have obtained colocation; that it would have deployed equipment and provisioned services; that enterprise and government customers would have chosen Ridgepoint over the dozens of other carriers serving the corridor; and that Ridgepoint would have earned $127 million in profits from those hypothetical customer relationships over a five-year period.

Lost-profit projections premised on hypothetical future business — business that has never been contracted for, that has no concrete basis in existing customer demand, and that depends upon a series of speculative assumptions — are insufficient to state a plausible claim for antitrust damages absent well-pleaded factual allegations establishing a concrete foundation for those projections. See Dunmore Industries, 501 F.3d at 312 (noting that antitrust damages must be based on "concrete" evidence, not speculation); Covad, 398 F.3d at 674 (expressing skepticism of damages theories premised on projected future revenues).

While the adequacy of damages allegations is not always a basis for dismissal under Rule 12(b)(6), the wholly speculative nature of Ridgepoint's damages theory serves as a further indication that the Complaint is implausible on its face. A claim premised on $381 million in trebled damages derived from hypothetical future business that Ridgepoint has never conducted, at facilities where it has never operated, serving customers it has never contracted with, does not state a plausible claim for relief. The damages theory is of a piece with the other deficiencies in the Complaint: it reflects Ridgepoint's attempt to use the antitrust laws to compel a business relationship that the market has not provided and that Northgate has no obligation to create.

CONCLUSION

For the foregoing reasons, Ridgepoint's Complaint fails to state a plausible claim for relief under Section 2 of the Sherman Act. The Complaint does not satisfy the demanding standards established by the Supreme Court in Aspen Skiing and Trinko for refusal-to-deal liability. Specifically:

• There was no prior course of dealing at any of the fourteen disputed facilities. The expired Master Interconnection Agreement covered only three different facilities in northern Virginia, none of which are at issue in this case. The absence of a prior voluntary course of dealing at the relevant locations is independently dispositive.

• Northgate's Wholesale Access Policy is a legitimate, facially neutral business practice that was adopted in January 2020 — more than fourteen months before Ridgepoint's first interconnection request. The Complaint's conclusory allegation of pretext is insufficient under Iqbal and Twombly to overcome this legitimate business justification.

• The Complaint does not and cannot allege that Northgate sacrificed short-term profits by declining to accommodate a below-threshold customer at capacity-constrained facilities. To the contrary, Northgate's conduct was economically rational.

• The proposed relevant market is implausibly narrow, excluding obvious competitive substitutes such as cable broadband, fixed wireless access, and wholesale ethernet services. Under a properly defined market, Northgate's share falls to approximately 31% — far below the levels necessary to support an inference of monopoly power.

• The existence of comprehensive regulatory alternatives under the Communications Act — which Ridgepoint itself is actively invoking in a parallel FCC proceeding — further counsels against extending antitrust liability.

Defendants Northgate Telecommunications PLC and Northgate Networks America Inc. respectfully request that the Court grant the Motion to Dismiss and dismiss Ridgepoint's Complaint with prejudice.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Elaine Forsythe (VSB No. 48217) Howard Bellamy (admitted pro hac vice) Aaron Liu (VSB No. 93054) Monica Reyes (VSB No. 87621)

Calderwood & Harkness LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-4100 Facsimile: (202) 555-4101

Email: eforsythe@calderwoodharkness.com

450 Lexington Avenue, 35th Floor New York, NY 10017 Telephone: (212) 555-7800

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

Dated: November 14, 2022

CERTIFICATE OF SERVICE

I hereby certify that on November 14, 2022, a true and correct copy of the foregoing Memorandum of Law in Support of Defendants' Motion to Dismiss Plaintiff's Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) was served upon all counsel of record via the Court's CM/ECF electronic filing system, which will send a notification of electronic filing to the following:

Victoria Hargrove Daniel Stoyanov HARGROVE, WINSLOW & BURKE LLP 900 17th Street NW, Suite 600 Washington, D.C. 20006 Telephone: (202) 555-2300

Email: vhargrove@hwblaw.com

Email: dstoyanov@hwblaw.com

Counsel for Plaintiff Ridgepoint Communications Inc.

________________________________________

Elaine Forsythe (VSB No. 48217)

RIDGEPOINT COMMUNICATIONS INC.,

Plaintiff,

NORTHGATE TELECOMMUNICATIONS PLC and NORTHGATE NETWORKS AMERICA INC.,

Defendants.

Ashcroft v. Iqbal, 556 U.S. 662 (2009)	passim
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985)	passim
Thackeray Corporation v. Twombly, 550 U.S. 544 (2007)	passim
Westvale Holdings. v. Pemberton Corporation, 501 F.3d 297 (3d Cir. 2007)	22, 28
Covad Commc'ns Co. v. Thackeray Corporation, 398 F.3d 666 (D.C. Cir. 2005)	18, 19, 26
Calderon Industries v. Image Technical Services, Inc., 504 U.S. 451 (1992)	24
Geneva Pharms. Tech. Corp. v. Barr Labs., Inc., 386 F.3d 485 (2d Cir. 2004)	15
Goldwasser v. Ameritech Corp., 222 F.3d 390 (7th Cir. 2000)	30
Hicks v. PGA Tour, Inc., 897 F.3d 1157 (9th Cir. 2018)	16, 17
MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124 (9th Cir. 2004)	18, 26
Morris Commc'ns Corp. v. PGA Tour, Inc., 364 F.3d 1288 (11th Cir. 2004)	17
Novell, Inc. v. Kestrel Partners LLC, 731 F.3d 1064 (10th Cir. 2013)	16, 17, 21
Pac. Bell Tel. Co. v. Greaves Corporation, 555 U.S. 438 (2009)	15, 20
Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430 (3d Cir. 1997)	25
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993)	28

Todd v.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6)
Filed: November 14, 2022
Elaine Forsythe (VSB No. 48217) Howard Bellamy (admitted pro hac vice) Aaron Liu (VSB No. 93054) Monica Reyes (VSB No. 87621) CALDERWOOD & HARKNESS LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-4100
450 Lexington Avenue, 35th Floor New York, NY 10017 Telephone: (212) 555-7800
Attorneys for Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.
TABLE OF CONTENTS
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TABLE OF AUTHORITIES
Cases
Statutes and Regulations
Secondary Authorities
PRELIMINARY STATEMENT
This is a private antitrust action brought by Plaintiff Ridgepoint Communications Inc. ("Ridgepoint" or "Plaintiff"), a regional competitive local exchange carrier ("CLEC"), against Defendants Northgate Telecommunications PLC ("Northgate") and its wholly owned U.S. subsidiary, Northgate Networks America Inc. ("NNA") (collectively, "Defendants" or "Northgate"). Ridgepoint asserts a single count of monopolization under Section 2 of the Sherman Act, 15 U.S.C. § 2, premised upon the theory that Northgate's decision not to grant Ridgepoint interconnection and physical colocation access at fourteen specific Northgate central-office and meet-me-room facilities in the Mid-Atlantic region constitutes an unlawful refusal to deal.
The gravamen of Ridgepoint's Complaint is straightforward: Ridgepoint wants access to Northgate's privately owned facilities, Northgate has declined to provide that access, and Ridgepoint asks this Court to compel Northgate to open its doors. The Sherman Act imposes no such obligation. Under controlling Supreme Court precedent — most importantly, Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), and Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) — a firm's unilateral refusal to deal with a competitor gives rise to antitrust liability, if at all, only in the most extraordinary circumstances. As the Court explained in Trinko, refusal-to-deal claims occupy "at or near the outer boundary of § 2 liability." 540 U.S. at 409. Those extraordinary circumstances are not present here.
Ridgepoint's Complaint fails on each of the essential elements required to state a Section 2 refusal-to-deal claim. First, the Complaint does not allege — because it cannot allege — a prior voluntary course of dealing at any of the fourteen disputed facilities. The only prior contractual relationship between the parties was a Master Interconnection Agreement covering three entirely different facilities in northern Virginia, and that agreement expired by its own terms on June 14, 2020. The fourteen facilities identified in the Complaint are facilities at which Ridgepoint has never had colocation or interconnection access of any kind. The absence of a prior course of dealing at the relevant facilities is dispositive under Aspen Skiing and its progeny.
Second, Northgate's Wholesale Access Policy ("WAP"), adopted in January 2020 — more than a year before Ridgepoint's first interconnection request — is a commercially reasonable, facially neutral internal policy that provides a legitimate business justification for the access decisions at issue. The WAP applies uniformly to all third-party colocation requests and sets a minimum annual revenue commitment of $5 million, a threshold that Ridgepoint, at $1.8 million in annual spend, does not approach.
Third, the Complaint does not plausibly allege that Northgate sacrificed short-term profits in order to harm Ridgepoint. To the contrary, the Complaint's own allegations reveal that Northgate's facilities operate at or above 85% capacity utilization, making it economically rational — not anticompetitive — for Northgate to reserve scarce facility space for higher-value wholesale partners rather than accommodate a below-threshold customer.
Fourth, the Complaint defines the relevant market so narrowly as to be implausible on its face. By artificially restricting the product market to "last-mile enterprise fiber-optic transport services" of 1 Gbps and above — while excluding obvious substitutes such as cable broadband, fixed wireless access, and wholesale ethernet services — Ridgepoint has gerrymandered a market definition designed to inflate Northgate's market share from a non-monopolistic 31% to an artificially elevated 68%.
Additionally, the existence of comprehensive regulatory remedies under Sections 251 and 252 of the Communications Act — remedies specifically designed to address interconnection disputes of this kind — further undermines any justification for extending antitrust liability. Indeed, Ridgepoint has itself filed an FCC complaint raising the identical interconnection issues, confirming that the regulatory pathway is both available and being pursued.
For each and all of these reasons, Northgate respectfully requests that the Court dismiss Ridgepoint's Complaint with prejudice under Federal Rule of Civil Procedure 12(b)(6).
STATEMENT OF FACTS
The following facts are drawn from the allegations set forth in Ridgepoint's Complaint (ECF No. 1), accepted as true solely for purposes of this motion. Where indicated, Defendants also reference documents incorporated by reference into the Complaint, including the Master Interconnection Agreement, the Wholesale Access Policy, and publicly available filings.
A. The Parties
1. Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.
Defendant Northgate Telecommunications PLC is a public limited company organized under the laws of England and Wales, with its principal executive offices located at 14 Broadwall Lane, London SE1 9PQ, United Kingdom. Northgate's American Depositary Receipts are listed on the Nasdaq Global Select Market under the ticker symbol "NTP." Northgate is a global provider of fiber-optic telecommunications infrastructure, enterprise connectivity services, and cloud-based network management platforms.
Defendant Northgate Networks America Inc. ("NNA") is a corporation organized under the laws of Delaware, with its principal executive offices located at 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, Virginia 22182. NNA is a wholly owned subsidiary of Northgate and serves as the primary operating entity for Northgate's business in the United States. NNA owns and operates approximately 42,000 route-miles of fiber-optic backbone and metropolitan-ring infrastructure across eighteen U.S. states, with a primary concentration along the eastern seaboard from Maine to Florida. In addition to its fiber-optic transport business, NNA offers enterprise cloud-connectivity services and SaaS-based network management platforms marketed under the "NorthgateOS™" brand.
For fiscal year 2022, Northgate reported consolidated revenue of £4.87 billion (approximately $5.96 billion at prevailing exchange rates). Of this total, U.S. revenue attributable to NNA was approximately $2.41 billion, representing approximately 40.4% of consolidated revenue. As of September 2022, Northgate's aggregate market capitalization was approximately $11.3 billion. Northgate's Chief Executive Officer is Sir Malcolm Prentice, KBE. NNA's U.S. President is Diane Okoro, and its Chief Regulatory Officer is Patrick Salazar.
Northgate and NNA compete in a dynamic and intensely competitive telecommunications market against numerous well-capitalized providers, including — among many others — Camberwell Enterprises, Ashgrove & Co., Ostrander Industries (formerly Kestrel Holdings), Fenmore Partners LLC, Stonefield Corporation, and Northgate Holdings. The Mid-Atlantic region alone is served by more than forty facilities-based telecommunications carriers, a fact that the Complaint conspicuously ignores.
2. Plaintiff Ridgepoint Communications Inc.
Plaintiff Ridgepoint Communications Inc. is a corporation organized under the laws of Delaware, with its principal executive offices located at 3500 Market Street, Suite 700, Philadelphia, Pennsylvania 19104. Ridgepoint operates as a competitive local exchange carrier ("CLEC") and enterprise broadband provider in Pennsylvania, New Jersey, Delaware, Maryland, and Virginia. Ridgepoint owns and leases approximately 6,200 route-miles of fiber-optic infrastructure across these five states.
For fiscal year 2022, Ridgepoint reported revenue of approximately $387 million. It employs approximately 1,450 individuals. Ridgepoint's Chief Executive Officer and Founder is Gregory Trent.
Ridgepoint is privately held. Since a leveraged buyout completed in November 2018 and valued at approximately $510 million, approximately 78% of Ridgepoint's equity has been owned by Caravel Capital Partners LP, a mid-market private equity fund based at 1700 JFK Boulevard, Suite 2900, Philadelphia, Pennsylvania 19103. The Trent family retains the remaining 22% equity stake.
Ridgepoint is represented in this action by Hargrove, Winslow & Burke LLP of Washington, D.C. and Philadelphia, with Victoria Hargrove serving as lead partner. Upon information and belief, counsel's fee arrangement includes a partial contingency component consisting of a reduced hourly rate plus 20% of any monetary recovery — a structure that may bear upon the economic incentives underlying this litigation. Ridgepoint is not without resources, nor is it without competitive alternatives. As discussed below, Ridgepoint itself operates thousands of route-miles of fiber-optic infrastructure throughout the very corridor in which it alleges Northgate holds a monopoly.
B. Northgate's Wholesale Access Policy
In January 2020, Northgate adopted the Wholesale Access Policy ("WAP"), an internal business policy applicable across NNA's U.S. facilities. The WAP was developed by Northgate's commercial strategy and facilities management teams in response to increasing demand for colocation space at NNA's central-office and meet-me-room facilities, many of which had reached or were approaching capacity limits.
Under the WAP, third-party physical colocation at Northgate facilities is restricted to existing wholesale partners that meet a minimum annual revenue commitment of $5 million per year. This threshold was established based on Northgate's internal analysis of the revenue levels necessary to justify the capital expenditures and operational costs associated with accommodating third-party colocation, including power provisioning, cooling, physical security, cross-connect management, and ongoing maintenance.
The WAP was adopted as a commercially reasonable measure to optimize limited facility capacity for higher-value wholesale relationships. It was developed in the context of Northgate's broader facility planning and capital allocation processes, which included a comprehensive assessment of capacity utilization across NNA's U.S. facility portfolio. The WAP was not adopted in response to any request from Ridgepoint, nor was it directed at Ridgepoint or any other specific carrier. It was a generally applicable policy, adopted in January 2020, more than fourteen months before Ridgepoint submitted its first interconnection request in March 2021.
The Complaint acknowledges the existence of the WAP but alleges, in wholly conclusory fashion, that it was adopted "specifically to exclude competitive carriers from the Mid-Atlantic market." Compl. ¶ 47. This allegation is unsupported by any factual matter and is contradicted by the timeline of events and the facially neutral terms of the policy itself.
C. The Prior Master Interconnection Agreement and Its Expiration
On June 15, 2015, Northgate and Ridgepoint entered into a Master Interconnection Agreement (the "MIA"). The MIA granted Ridgepoint physical colocation and interconnection access at three specifically identified NNA facilities located in northern Virginia. The MIA was a negotiated commercial agreement with a defined five-year term, and it expired by its own terms on June 14, 2020.
Following the expiration of the MIA, Northgate declined to renew the agreement. Northgate communicated its decision to Ridgepoint in a letter dated May 8, 2020, from Patrick Salazar, Northgate's Chief Regulatory Officer, to Gregory Trent, Ridgepoint's CEO. The letter cited the newly adopted WAP and noted that Ridgepoint's aggregate annual spend with Northgate — approximately $1.8 million in fiscal year 2021 — fell well below the WAP's $5 million minimum annual revenue commitment threshold.
Rather than immediately terminate Ridgepoint's occupancy at the three MIA facilities, Northgate permitted Ridgepoint to continue occupying the existing colocation spaces under a month-to-month holdover arrangement. Under the holdover terms, Ridgepoint pays a holdover rate of $14,400 per month per facility, representing 120% of the prior contractual rate of $12,000 per month — a holdover premium of $2,400 per month per facility, or $7,200 per month in aggregate ($86,400 annually). Ridgepoint continues to occupy these three facilities under this holdover arrangement as of the date of this filing.
Critically — and this point cannot be overstated — none of the fourteen facilities at issue in this litigation are among the three northern Virginia facilities covered by the expired MIA. The MIA was a limited, site-specific contractual arrangement that, by its own terms, conferred no rights with respect to any Northgate facilities other than the three specifically identified therein. The Complaint does not allege otherwise; it simply seeks to extrapolate from a narrow, expired contract a generalized obligation to deal at entirely different locations. The law does not support such an extrapolation.
D. Ridgepoint's Interconnection and Colocation Requests
Between March 2021 and August 2022, Ridgepoint submitted interconnection and physical colocation requests to Northgate for fourteen specific NNA facilities located in the Philadelphia–Baltimore–Washington, D.C. corridor. The fourteen facilities are:
1. 401 N. Broad Street, Philadelphia, PA 19108
2. 1500 Spring Garden Street, Philadelphia, PA 19130
3. 100 Delancey Place, Cherry Hill, NJ 08034
4. 220 S. Warren Street, Trenton, NJ 08608
5. 700 E. Pratt Street, Baltimore, MD 21202
6. 1 W. Fayette Street, Baltimore, MD 21201
7. 33 S. Gay Street, Baltimore, MD 21202
8. 9221 Corporate Boulevard, Rockville, MD 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, VA 20147
12. 21571 Beaumeade Circle, Ashburn, VA 20147
13. 1807 Michael Faraday Court, Reston, VA 20190
14. 8100 Boone Boulevard, Tysons Corner, VA 22182
Northgate declined each of these requests. In its written responses, Northgate cited three grounds: (a) capacity constraints at the specific facilities, all of which were operating at or above 85% capacity utilization at the time of the respective requests; (b) the absence of any prior course of dealing with Ridgepoint at those particular locations; and (c) Ridgepoint's failure to meet the WAP's $5 million minimum annual revenue commitment threshold. Each declination was documented in a written letter from NNA's commercial operations team to Ridgepoint's regulatory affairs department, with copies to Northgate's legal department.
E. Ridgepoint's Complaint
Ridgepoint filed its Complaint on September 19, 2022, asserting a single count under Section 2 of the Sherman Act, 15 U.S.C. § 2. The Complaint alleges that Northgate has monopolized the purported market for "last-mile enterprise fiber-optic transport services" in the Philadelphia–Baltimore–Washington, D.C. corridor through its refusal to grant Ridgepoint interconnection and colocation access at the fourteen facilities identified above.
The Complaint defines the relevant product market as "last-mile enterprise fiber-optic transport services (lit and dark fiber) with speeds of 1 Gbps and above, sold to enterprise and government customers." Compl. ¶ 62. Notably, this definition excludes cable broadband services, fixed wireless access, wholesale ethernet services, and other technologies routinely used by enterprise customers to obtain high-speed connectivity — all of which are readily available from multiple providers throughout the geographic area in question.
The Complaint defines the relevant geographic market as the "Philadelphia–Baltimore–Washington, D.C. metropolitan corridor," encompassing portions of Pennsylvania, New Jersey, Delaware, Maryland, Virginia, and the District of Columbia. Compl. ¶ 67.
Relying on the preliminary analysis of its economic expert, Dr. Leonard Kuo of Cavendish University, the Complaint alleges that Northgate holds a 68% share of this purported market. Compl. ¶ 71. However, as discussed below, this market share figure is entirely an artifact of the implausibly narrow market definition employed by Dr. Kuo.
The Complaint seeks $127 million in lost profits over a five-year projected period (2022–2027), which Ridgepoint trebles to $381 million under Section 4 of the Clayton Act, 15 U.S.C. § 15. Compl. ¶ 89. The Complaint also seeks permanent injunctive relief compelling Northgate to grant interconnection access at the fourteen facilities. Compl., Prayer for Relief ¶¶ 2–3.
LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint. Under this standard, a complaint must be dismissed unless it alleges "enough facts to state a claim to relief that is plausible on its face." Thackeray Corporation v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The plausibility standard is not a "probability requirement," but it demands "more than a sheer possibility that a defendant has acted unlawfully." Id. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief." Id. (quoting Twombly, 550 U.S. at 557).
This plausibility standard applies with particular rigor in the antitrust context. In Twombly, which was itself an antitrust case, the Supreme Court cautioned that courts must ensure that antitrust claims rest on more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." 550 U.S. at 555. This heightened scrutiny reflects the reality that antitrust litigation imposes "enormous" Discovery costs on defendants and that "proceeding to antitrust discovery can be expensive." Id. at 558. The costs of antitrust discovery, combined with the treble-damages remedy available under the Clayton Act, create an in terrorem settlement dynamic that makes rigorous pleading-stage review essential.
In ruling on a motion to dismiss, the Court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. Iqbal, 556 U.S. at 678. The Court is not required, however, to accept legal conclusions, naked assertions, or conclusory statements devoid of further factual enhancement. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.
Particularly relevant to the claims asserted here, the Supreme Court has long recognized that "as a general matter, the Sherman Act does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal." Trinko, 540 U.S. at 408 (quoting United States v. Colgate & Co., 250 U.S. 300, 307 (1919)). This fundamental principle of freedom to choose one's trading partners "has been a central part of the antitrust canon since at least 1919." Id. Any departure from this principle must be grounded in the extraordinary circumstances recognized in Aspen Skiing — circumstances that the Complaint here does not and cannot allege.
ARGUMENT
I. RIDGEPOINT FAILS TO STATE A REFUSAL-TO-DEAL CLAIM UNDER SECTION 2 OF THE SHERMAN ACT
A. The Legal Framework for Refusal-to-Deal Claims Under *Aspen Skiing* and *Trinko*
Section 2 of the Sherman Act prohibits monopolization, which requires proof of "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570–71 (1966). Within this framework, claims based upon a monopolist's unilateral refusal to deal with a competitor represent "at or near the outer boundary of § 2 liability." Trinko, 540 U.S. at 409.
The narrow doctrinal exception permitting antitrust liability for a refusal to deal derives from the Supreme Court's decision in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985). In Aspen Skiing, the Court upheld a jury verdict finding that the operator of three of four ski mountains in Aspen, Colorado, had violated Section 2 by refusing to continue a long-standing joint-ticketing arrangement with the operator of the fourth mountain. The Court emphasized several critical features of the arrangement: the parties had voluntarily cooperated in offering a joint multi-day lift ticket for years; the monopolist had terminated that arrangement despite its profitability; and the monopolist's conduct was not motivated by any legitimate business reason, but rather by a desire to harm its competitor. Id. at 601–11.
The essential elements of an Aspen Skiing refusal-to-deal claim, as refined by subsequent precedent, are: (i) a monopolist's termination of a prior voluntary and profitable course of dealing with a competitor; (ii) evidence suggesting a willingness to sacrifice short-term profits in order to achieve an anticompetitive end; and (iii) resulting harm to consumers. See Trinko, 540 U.S. at 408–10; Novell, Inc. v. Kestrel Partners LLC, 731 F.3d 1064, 1074–75 (10th Cir. 2013) (Gorsuch, J.). Each of these elements is essential, and the absence of any one is independently fatal to the claim.
In Trinko, the Supreme Court dramatically narrowed the scope of Aspen Skiing, declining to extend refusal-to-deal liability beyond the specific facts of that case. The Trinko Court observed that Aspen Skiing "is at or near the outer boundary of § 2 liability," and cautioned that "[t]he indeterminate conduct at issue — the defendant's unilateral refusal to deal with its rivals — is unlike the paradigmatic acts that constitute Sherman Act violations, such as price fixing and market allocation." 540 U.S. at 408–09. The Court emphasized that compelled dealing under the antitrust laws "may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities," thereby undermining the competitive process the antitrust laws are designed to protect. Id. at 407–08.
The Trinko Court expressly distinguished Aspen Skiing on the ground that the defendant in that case had terminated a preexisting, voluntary, and profitable relationship. The Court noted that in Trinko, "the complaint does not allege that Ashgrove & Co. voluntarily engaged in a course of dealing with its rivals, or would ever have done so absent statutory compulsion." Id. at 409. The absence of a prior voluntary course of dealing was central to the Court's holding.
Moreover, the Trinko Court emphasized that where a regulatory framework exists to address the challenged conduct, the justification for judicial intervention through the antitrust laws is diminished. Id. at 411–12. The existence of regulatory oversight "diminishes the likelihood that the [complained-of] conduct would result in the kind of harm antitrust law is designed to prevent." Id.
Courts of appeals have faithfully applied the Trinko framework, consistently requiring clear and well-pleaded allegations satisfying each element of the Aspen Skiing test before permitting a Section 2 refusal-to-deal claim to proceed past the pleading stage. See, e.g., Novell, 731 F.3d at 1074–75; Hicks v. PGA Tour, Inc., 897 F.3d 1157, 1168–69 (9th Cir. 2018); Morris Commc'ns Corp. v. PGA Tour, Inc., 364 F.3d 1288, 1295 (11th Cir. 2004). As Professors Areeda and Hovenkamp have observed, "a monopolist's decision not to cooperate with a rival has rarely, and should rarely, be held to violate the antitrust laws." Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 772a (4th ed. 2018). A firm — even a monopolist — "has no general duty to help its competitors." Id. ¶ 772b.
Against this demanding doctrinal backdrop, Ridgepoint's Complaint fails at every turn. The Complaint does not satisfy any of the elements required under Aspen Skiing and Trinko to state a plausible refusal-to-deal claim. Each independent failure provides sufficient ground for dismissal with prejudice.
B. There Was No Prior Voluntary Course of Dealing at the Fourteen Disputed Facilities
The single most critical fact in this case — and the fact that is alone dispositive of Ridgepoint's claim — is that Ridgepoint has never had interconnection or colocation access at any of the fourteen facilities that are the subject of its Complaint. The threshold requirement under Aspen Skiing is the termination of a prior voluntary and profitable course of dealing. Here, there is no prior dealing to terminate.
The Complaint attempts to sidestep this fatal deficiency by pointing to the parties' expired Master Interconnection Agreement. But the MIA covered only three facilities in northern Virginia — none of which are among the fourteen facilities identified in the Complaint. Compl. ¶¶ 37–42. The MIA was a limited, site-specific contractual arrangement negotiated and executed in June 2015, with a defined five-year term that expired by its own terms on June 14, 2020. By its express language, the MIA conferred no rights with respect to any Northgate facilities other than the three specifically identified therein.
Ridgepoint's attempt to bootstrap this narrow, expired agreement into a generalized obligation to grant access at fourteen entirely different facilities located throughout a multi-state corridor is legally and factually unfounded. Nothing in Aspen Skiing or any subsequent decision suggests that a course of dealing at specific identified locations creates an open-ended obligation to deal at different locations. To the contrary, the Aspen Skiing analysis is inherently fact-specific: the relevant question is whether the monopolist terminated a prior course of dealing with respect to the specific product, service, or facility at issue. See Trinko, 540 U.S. at 409 (emphasizing the absence of a "voluntar[y] course of dealing" as to the specific service at issue); Covad Commc'ns Co. v. Thackeray Corporation, 398 F.3d 666, 673 (D.C. Cir. 2005) (examining whether there was a prior course of dealing with respect to the particular interconnection access at issue).
The Complaint is devoid of any factual allegation that Northgate ever voluntarily provided Ridgepoint with colocation at any of the fourteen facilities, or that Northgate previously dealt with Ridgepoint on comparable terms at those locations. Indeed, the Complaint does not allege that Ridgepoint ever even requested access to any of these fourteen facilities prior to March 2021 — more than five years into the parties' relationship and more than a year after the WAP was adopted. The fourteen facilities are new facilities — new to the relationship between these parties — at which no dealing has ever occurred.
Moreover, the month-to-month holdover arrangement at the three MIA facilities further demonstrates that Northgate has not cut off Ridgepoint entirely. Despite the expiration of the MIA and Ridgepoint's failure to meet the WAP threshold, Northgate has permitted Ridgepoint to continue occupying its existing colocation spaces at the three northern Virginia locations, albeit at a holdover rate reflecting a 20% premium over the prior contractual rate. This continued accommodation is the opposite of the conduct condemned in Aspen Skiing, where the monopolist refused to sell its competitor lift tickets even at retail prices. Aspen Skiing, 472 U.S. at 593. Here, Northgate continues to transact with Ridgepoint at the sites where the parties have an existing relationship, while declining to extend that relationship to new locations where no prior dealing exists.
Courts have consistently held that the absence of a prior course of dealing at the specific facilities or for the specific services at issue is fatal to an Aspen Skiing claim. In MetroNet Services Corp. v. Qwest Corp., 383 F.3d 1124, 1132 (9th Cir. 2004), the Ninth Circuit held that where a CLEC sought interconnection access at facilities where it had never previously been collocated, the absence of a prior course of dealing precluded a refusal-to-deal claim. Similarly, in Covad, 398 F.3d at 673, the D.C. Circuit emphasized that the Aspen Skiing framework requires the termination of a specific pre-existing relationship — not merely a refusal to create a new one. As the D.C. Circuit explained, "[t]he antitrust laws do not require a monopolist to cooperate with its rivals," and a refusal to deal "does not create liability where the parties had no pre-existing business relationship." Id.
Ridgepoint cannot transform a request for new access into a claim of terminated access. The Complaint acknowledges that the prior MIA covered only three specific facilities — none of which are at issue here. This concession is dispositive. Because there was no prior voluntary course of dealing at the fourteen disputed facilities, the Aspen Skiing threshold requirement is not met, and the Complaint must be dismissed.
C. Northgate's Wholesale Access Policy Is a Legitimate Business Justification
Even if Ridgepoint could somehow satisfy the threshold requirement of a prior course of dealing — which it cannot — the Complaint would still fail because Northgate has an independently sufficient legitimate business justification for its access decisions: the Wholesale Access Policy.
1. The WAP Is a Facially Neutral, Commercially Reasonable Policy. The WAP was adopted in January 2020, more than fourteen months before Ridgepoint submitted its first interconnection request in March 2021. It is a generally applicable business policy that applies uniformly to all third-party colocation requests across NNA's U.S. facilities. The WAP is not directed at Ridgepoint specifically, and the Complaint does not allege that the WAP treats Ridgepoint differently from any other similarly situated carrier.
The $5 million annual revenue commitment threshold reflects Northgate's legitimate interest in reserving finite facility capacity for higher-value wholesale partnerships. The Complaint itself acknowledges that the fourteen disputed facilities were operating at or above 85% capacity utilization at the time of Ridgepoint's requests. Compl. ¶ 56. Under these circumstances, Northgate's decision to allocate scarce facility space to partners generating at least $5 million in annual revenue is a textbook example of commercially reasonable resource allocation. A firm confronting binding capacity constraints acts rationally when it prioritizes customers that generate the greatest return on its limited available resources.
Ridgepoint's fiscal year 2021 annual spend with Northgate was approximately $1.8 million — well below the $5 million threshold. The Complaint does not allege that Ridgepoint was willing to commit to $5 million in annual revenue, offered to do so and was rebuffed, or took any other step to meet the WAP's requirements. Indeed, the Complaint implicitly concedes that Ridgepoint does not and cannot meet the WAP threshold, while arguing that the threshold itself is anticompetitive. This argument fails as a matter of law. A monopolist's decision to impose minimum purchase requirements — particularly in the context of capacity-constrained facilities — is precisely the kind of legitimate business conduct that the antitrust laws protect rather than condemn.
2. Ridgepoint's Allegation of Pretext Is Conclusory and Implausible. The Complaint's sole attempt to undermine the legitimacy of the WAP is the allegation that it was adopted "specifically to exclude competitive carriers from the Mid-Atlantic market." Compl. ¶ 47. This allegation is the very definition of a "threadbare recital" that Iqbal instructs courts to disregard. 556 U.S. at 678. It is a naked conclusion of anticompetitive intent, unsupported by any particular facts from which such intent could reasonably be inferred.
The timeline of events affirmatively contradicts the pretext allegation. The WAP was adopted in January 2020. Ridgepoint's interconnection requests did not begin until March 2021, over fourteen months later. The Complaint does not allege that Northgate was aware of, or anticipating, any specific interconnection request from Ridgepoint at the time the WAP was adopted. Nor does the Complaint allege that any Northgate employee or officer made statements suggesting an intent to target Ridgepoint or other CLECs. The Complaint offers no internal communications, board minutes, memoranda, or other documentary evidence suggesting that the WAP was adopted for anticompetitive purposes. It relies entirely on the bare assertion of pretext, which is precisely the kind of conclusory allegation that Iqbal and Twombly hold insufficient to survive a motion to dismiss.
Under Iqbal, the Court must first identify the conclusory allegations in the Complaint and set them aside, then evaluate whether the remaining well-pleaded factual allegations state a plausible claim. 556 U.S. at 679. When the conclusory allegation of pretext is set aside, what remains is a facially neutral business policy adopted more than a year before any request from Ridgepoint, applied uniformly across Northgate's entire U.S. facility portfolio, and justified by documented capacity constraints. These facts support a legitimate business justification, not an anticompetitive scheme.
Even under the Aspen Skiing framework, a defendant's proffer of a legitimate business justification is sufficient to rebut an inference of anticompetitive intent absent well-pleaded facts demonstrating that the justification is pretextual. See Novell, 731 F.3d at 1075 (holding that a legitimate business justification defeats a refusal-to-deal claim unless the plaintiff can show the justification is a pretext). Here, the WAP's commercial rationale — capacity management and revenue optimization — is not merely plausible; it is the obvious and natural explanation for the challenged conduct. There is nothing suspicious about a firm with capacity-constrained facilities setting minimum revenue thresholds for third-party colocation. To the contrary, it would be commercially irrational not to do so.
3. The Refusal Did Not Sacrifice Short-Term Profits. A hallmark of the Aspen Skiing doctrine is the requirement that the monopolist have foregone short-term profits in order to inflict competitive harm. This "profit sacrifice" test serves as a critical screen to distinguish legitimately competitive behavior from conduct motivated by anticompetitive purpose. See Pac. Bell Tel. Co. v. Greaves Corporation, 555 U.S. 438, 451 (2009); Novell, 731 F.3d at 1075. Where a firm's refusal to deal is profitable — or at least economically rational — in the short term, the refusal cannot support an inference of anticompetitive intent.
Northgate did not sacrifice profits by declining to provide Ridgepoint with colocation at the fourteen facilities. To the contrary, Northgate's capacity constraints — all fourteen facilities operating at or above 85% utilization — mean that allocating space to Ridgepoint, which fell far below the WAP revenue threshold, would have been less profitable than continuing to serve existing wholesale customers that meet the $5 million commitment. In economic terms, the opportunity cost of accommodating Ridgepoint at these capacity-constrained facilities would have exceeded the revenue Ridgepoint was prepared to generate. Declining to serve a below-threshold customer in favor of higher-revenue customers at capacity-constrained facilities is profit-maximizing, not profit-sacrificing.
The Complaint does not allege, nor could it plausibly allege, that Northgate forwent profitable dealing with Ridgepoint. Ridgepoint's $1.8 million annual spend is barely one-third of the $5 million minimum threshold. The Complaint does not allege that the fourteen facilities had available capacity that was going unused, or that Northgate declined profitable arrangements with Ridgepoint in favor of leaving space vacant. Such an allegation would be necessary to invoke the profit-sacrifice rationale of Aspen Skiing, and no such allegation appears in the Complaint.
The contrast with Aspen Skiing is instructive. In that case, the monopolist refused to sell lift tickets to its competitor even at retail prices — a refusal that was economically irrational and could only be explained by a desire to harm the competitor. 472 U.S. at 593. Here, Northgate's refusal to accommodate a below-threshold customer at capacity-constrained facilities is economically rational and explicable without reference to any anticompetitive motive. The profit-sacrifice requirement is not satisfied, and this independent failure provides an additional basis for dismissal.
II. THE COMPLAINT DEFINES THE RELEVANT MARKET IN AN IMPLAUSIBLY NARROW MANNER
A. The Legal Standard for Market Definition at the Pleading Stage
A plaintiff asserting a Section 2 monopolization claim must plausibly allege a relevant product market and a relevant geographic market. See Twombly, 550 U.S. at 556. Market definition is not merely a technical exercise; it is "the foundation of any monopolization claim, because without a coherently defined market there is no way to evaluate the defendant's alleged market power." Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430, 436 (3d Cir. 1997).
While courts afford plaintiffs some degree of leeway in defining the relevant market at the pleading stage, dismissal is appropriate where the proposed market definition is "facially unsustainable" or where the complaint's own allegations undermine the proffered market boundaries. See Todd v. Severin Corporation, 275 F.3d 191, 199–200 (2d Cir. 2001) (noting that a market definition must be plausible); Queen City Pizza, 124 F.3d at 436–37 (affirming dismissal where the proposed market was "legally insufficient"); Calderon Industries v. Image Technical Services, Inc., 504 U.S. 451, 469 n.15 (1992) (observing that market definition requires identification of the relevant universe of products and services that are reasonably interchangeable). Importantly, a complaint's market definition need not be proven at the pleading stage, but it must be plausible — that is, it must not exclude "obvious alternative[s]" that would significantly alter the competitive analysis. Twombly, 550 U.S. at 556 n.4.
B. The Proposed Product Market Excludes Obvious Substitutes
Ridgepoint defines the relevant product market as "last-mile enterprise fiber-optic transport services (lit and dark fiber) with speeds of 1 Gbps and above, sold to enterprise and government customers." Compl. ¶ 62. This definition suffers from a fundamental and fatal deficiency: it excludes obvious competitive substitutes that enterprise and government customers routinely use to obtain high-speed connectivity.
The Complaint's product market definition is artificially narrow in at least three respects.
First, it excludes cable broadband services. Major cable operators, including Northpoint Enterprises and Brightwater Partners LLC, offer enterprise-grade broadband services in the Philadelphia–Baltimore–Washington, D.C. corridor at speeds exceeding 1 Gbps. These services are widely used by enterprise customers as substitutes for — or complements to — fiber-optic transport. The Complaint offers no explanation for excluding cable broadband, and no basis for concluding that enterprise customers view cable broadband as a non-substitute for fiber-optic transport at comparable speeds. In fact, the ongoing convergence of cable and fiber technologies — including the deployment of DOCSIS 4.0 technology capable of symmetric multi-gigabit speeds — has further eroded any meaningful distinction between cable and fiber-based enterprise connectivity services.
Second, the Complaint excludes fixed wireless access ("FWA") services. Providers such as Harborline & Co., Ashgrove & Co. (through its 5G Business Internet product), and numerous specialized wireless ISPs offer fixed wireless connectivity to enterprise customers in the Mid-Atlantic region at speeds of 1 Gbps and above. Fixed wireless access is an increasingly significant competitive alternative to last-mile fiber, particularly for enterprise customers that value rapid deployment and flexibility. The Complaint's exclusion of FWA services from the product market is unjustifiable.
Third, the Complaint excludes wholesale ethernet services. Multiple carriers in the Mid-Atlantic region — including Northgate Holdings, Cobalt Ridge Group, and Crestline Industries — offer wholesale ethernet transport services at speeds comparable to or exceeding 1 Gbps. Enterprise customers routinely procure ethernet transport as an alternative or supplement to dedicated fiber-optic facilities. The exclusion of wholesale ethernet from the product market is arbitrary and serves only to inflate Northgate's apparent market share.
The Complaint offers no explanation for excluding these alternatives. Enterprise customers routinely procure connectivity from cable operators, fixed wireless providers, and ethernet wholesalers, and regularly substitute among these options based on price, capacity, availability, and deployment timelines. The failure to account for these alternatives renders the Complaint's product market definition facially unsustainable.
Courts have consistently rejected narrowly defined telecommunications markets that artificially exclude competitive alternatives in order to inflate a defendant's apparent market share. See, e.g., Westvale Holdings. v. Pemberton Corporation, 501 F.3d 297, 307 (3d Cir. 2007) (emphasizing that market definition must account for "all products reasonably interchangeable by consumers"); Geneva Pharms. Tech. Corp. v. Barr Labs., Inc., 386 F.3d 485, 496 (2d Cir. 2004) (holding that a market definition excluding reasonable substitutes is "legally insufficient"). The U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines, while developed in the merger context, provide useful guidance: a relevant market should include all products to which "a significant percentage of buyers" would switch in response to a "small but significant and nontransitory increase in price." U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal Merger Guidelines § 4.1 (2010). The Complaint's product market definition fails this basic test.
The claimed 68% market share for Northgate — the figure generated by Dr. Kuo's "preliminary analysis" — is nothing more than an artifact of this implausibly narrow market definition. It is derived by limiting the market to fiber-only services and excluding cable, wireless, and ethernet alternatives that directly compete for the same enterprise customers. Under a properly defined market that includes these obvious substitutes, Northgate's share would be approximately 31% — far below the levels typically associated with monopoly power and far below the threshold necessary to support a plausible inference of market dominance. See Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993) (monopoly power requires a dominant share of the relevant market); Grinnell, 384 U.S. at 571 (finding monopoly power where the defendant held approximately 87% of the relevant market). A market share of approximately 31% is, by contrast, consistent with a competitive market — not a monopoly.
C. The Proposed Geographic Market Is Also Deficient
The Complaint's geographic market definition is similarly flawed. Ridgepoint defines the relevant geographic market as the "Philadelphia–Baltimore–Washington, D.C. metropolitan corridor," encompassing portions of six jurisdictions: Pennsylvania, New Jersey, Delaware, Maryland, Virginia, and the District of Columbia. Compl. ¶ 67.
This gerrymandered corridor is not a recognized economic or regulatory market. It is not a Metropolitan Statistical Area or Combined Statistical Area as defined by the U.S. Census Bureau. It does not correspond to any FCC-defined market area, LATA, or other standard telecommunications market boundary. Rather, the corridor appears to have been drawn specifically to encompass the geographic area where the fourteen disputed facilities are located while excluding adjacent regions where Ridgepoint faces robust competition and has ample access to alternative infrastructure.
The Complaint does not allege that customers located within this artificially drawn corridor cannot obtain comparable high-speed enterprise connectivity services from providers whose infrastructure lies outside the corridor boundaries. In fact, the corridor as defined encompasses one of the most densely served telecommunications markets in the United States, with extensive overlapping infrastructure owned and operated by dozens of facilities-based carriers. Enterprise customers in the Philadelphia–Baltimore–Washington, D.C. corridor are served by — among others — Camberwell Enterprises, Ashgrove & Co., Ostrander Industries, Northpoint Enterprises, Fenmore Partners LLC, Stonefield Corporation, Northgate Holdings, Cobalt Ridge Group, Crestline Industries, and numerous regional and local providers. The notion that Northgate holds monopoly power in this intensely competitive geography strains credulity.
Furthermore, Ridgepoint itself operates approximately 6,200 route-miles of owned and leased fiber-optic infrastructure — much of it within this very corridor. Compl. ¶ 14. Ridgepoint's own infrastructure demonstrates that it is not an excluded competitor desperately seeking entry into a foreclosed market; it is an established participant with substantial infrastructure of its own, seeking to expand by obtaining access to Northgate's particular facilities. The existence of Ridgepoint's own extensive infrastructure within the alleged monopoly market undermines any claim that Northgate is an indispensable monopolist within this geography.
D. Without a Plausible Relevant Market, the Monopoly Power Element Fails
Monopoly power — defined as "the power to control prices or exclude competition" within a relevant market, Grinnell, 384 U.S. at 571 — is an essential element of a Section 2 claim. The plaintiff must plausibly allege both a relevant market and that the defendant possesses monopoly power within that market. Spectrum Sports, 506 U.S. at 455–56.
As demonstrated above, the Complaint's relevant market definition is implausible because it excludes obvious competitive substitutes in both the product and geographic dimensions. If the market is defined to include the cable broadband, fixed wireless, and wholesale ethernet services that the Complaint ignores — as any reasonable market definition would — Northgate's market share falls from the alleged 68% to approximately 31%. A market share of 31% is insufficient to support an inference of monopoly power as a matter of law.
Courts routinely dismiss Section 2 claims where the alleged market share fails to cross the threshold necessary to support a plausible inference of monopoly power. While there is no rigid numerical cutoff, courts have consistently held that market shares below 50% are generally insufficient to support an inference of monopoly power, and that shares significantly above 50% — typically 70% or greater — are ordinarily required for a finding of monopolization. See Grinnell, 384 U.S. at 571 (monopoly power found at approximately 87%); Eastman Kodak, 504 U.S. at 481 (discussing market share thresholds); Dunmore Industries, 501 F.3d at 307. At 31%, Northgate's share under a properly defined market falls well below any recognized threshold.
Because the Complaint fails to plausibly allege a relevant market in which Northgate possesses monopoly power, the monopoly-power element of the Section 2 claim fails, and the Complaint must be dismissed.
III. REGULATORY ALTERNATIVES FURTHER UNDERMINE RIDGEPOINT'S CLAIM
Even beyond the substantive deficiencies detailed above, the existence of comprehensive regulatory remedies designed to address the precise conduct at issue further counsels against extending antitrust liability in this case.
The Trinko Court specifically addressed the relationship between regulatory remedies and antitrust enforcement. The Court observed that where "a regulatory structure designed to deter and remedy anticompetitive harm" exists, "the additional benefit to competition provided by antitrust enforcement" is marginal. 540 U.S. at 412. This is because "[j]ust as regulatory context may serve as a factor undermining the need for antitrust enforcement," the existence of an alternative remedy "diminishes the likelihood that the [complained-of] conduct would result in the kind of harm antitrust law is designed to prevent." Id.
Sections 251 and 252 of the Communications Act of 1996 establish a comprehensive regulatory framework governing the interconnection obligations of telecommunications carriers. 47 U.S.C. §§ 251, 252. Section 251 imposes interconnection duties on incumbent local exchange carriers and provides procedures by which competitive carriers may request interconnection, including physical colocation, at reasonable and nondiscriminatory rates, terms, and conditions. Section 252 establishes a detailed process for the negotiation, mediation, and arbitration of interconnection agreements, with oversight by state public utility commissions and the FCC. These provisions provide precisely the kind of regulatory mechanism that the Trinko Court identified as diminishing the need for antitrust intervention.
Ridgepoint's Complaint is, at bottom, an interconnection dispute of the kind that Congress committed to regulatory resolution. Ridgepoint alleges that it was denied interconnection and colocation access at specific facilities on terms it deems unreasonable. This is precisely the kind of dispute that Sections 251 and 252 were designed to address. The availability of these regulatory remedies at the FCC and before state commissions further diminishes the justification for judicial intervention via the antitrust laws.
Notably, Ridgepoint has in fact filed an FCC complaint (Docket WC-23-0042, filed February 7, 2023) raising the identical interconnection issues at the heart of this litigation. While this FCC filing post-dates the present motion, it underscores a critical point: the regulatory pathway is not merely theoretically available — it is actively being pursued by Ridgepoint itself. The existence of this parallel regulatory proceeding confirms that there is no gap in the regulatory framework that would justify extending antitrust liability. To the contrary, permitting Ridgepoint to simultaneously pursue the same claims before the FCC and in this Court via a treble-damages antitrust action would create precisely the kind of duplicative and potentially inconsistent proceedings that the Trinko framework was designed to avoid.
As the Seventh Circuit observed in Goldwasser v. Ameritech Corp., 222 F.3d 390, 400 (7th Cir. 2000), "Congress is perfectly capable of identifying the circumstances under which a duty to cooperate with rivals arises, and courts should be reluctant to impose such duties on their own through the medium of antitrust law." The Communications Act has done precisely that, providing a tailored regulatory mechanism for resolving interconnection disputes. This Court should decline Ridgepoint's invitation to graft treble-damages antitrust liability onto conduct that is squarely within the purview of that regulatory scheme.
IV. RIDGEPOINT'S DAMAGES ALLEGATIONS ARE SPECULATIVE AND DO NOT SAVE THE COMPLAINT
Even setting aside the fatal substantive deficiencies described in Points I through III, Ridgepoint's damages claim further illustrates the implausibility of the Complaint.
Ridgepoint seeks $127 million in lost profits over a five-year projected period (2022–2027), trebled to $381 million under Section 4 of the Clayton Act. Compl. ¶ 89. This figure is based entirely on speculative projections of revenue that Ridgepoint might have earned had it obtained colocation at the fourteen disputed facilities and had it then successfully acquired enterprise and government customers at those locations.
The Complaint does not allege that Ridgepoint had any existing customers at any of the fourteen facilities. It does not allege that Ridgepoint had executed, or was in the process of negotiating, any customer contracts contingent upon obtaining colocation at those sites. It does not identify any specific demand that was frustrated by Northgate's refusal. Instead, the damages theory rests entirely on a chain of hypothetical contingencies: that Ridgepoint would have obtained colocation; that it would have deployed equipment and provisioned services; that enterprise and government customers would have chosen Ridgepoint over the dozens of other carriers serving the corridor; and that Ridgepoint would have earned $127 million in profits from those hypothetical customer relationships over a five-year period.
Lost-profit projections premised on hypothetical future business — business that has never been contracted for, that has no concrete basis in existing customer demand, and that depends upon a series of speculative assumptions — are insufficient to state a plausible claim for antitrust damages absent well-pleaded factual allegations establishing a concrete foundation for those projections. See Dunmore Industries, 501 F.3d at 312 (noting that antitrust damages must be based on "concrete" evidence, not speculation); Covad, 398 F.3d at 674 (expressing skepticism of damages theories premised on projected future revenues).
While the adequacy of damages allegations is not always a basis for dismissal under Rule 12(b)(6), the wholly speculative nature of Ridgepoint's damages theory serves as a further indication that the Complaint is implausible on its face. A claim premised on $381 million in trebled damages derived from hypothetical future business that Ridgepoint has never conducted, at facilities where it has never operated, serving customers it has never contracted with, does not state a plausible claim for relief. The damages theory is of a piece with the other deficiencies in the Complaint: it reflects Ridgepoint's attempt to use the antitrust laws to compel a business relationship that the market has not provided and that Northgate has no obligation to create.
CONCLUSION
For the foregoing reasons, Ridgepoint's Complaint fails to state a plausible claim for relief under Section 2 of the Sherman Act. The Complaint does not satisfy the demanding standards established by the Supreme Court in Aspen Skiing and Trinko for refusal-to-deal liability. Specifically:
• There was no prior course of dealing at any of the fourteen disputed facilities. The expired Master Interconnection Agreement covered only three different facilities in northern Virginia, none of which are at issue in this case. The absence of a prior voluntary course of dealing at the relevant locations is independently dispositive.
• Northgate's Wholesale Access Policy is a legitimate, facially neutral business practice that was adopted in January 2020 — more than fourteen months before Ridgepoint's first interconnection request. The Complaint's conclusory allegation of pretext is insufficient under Iqbal and Twombly to overcome this legitimate business justification.
• The Complaint does not and cannot allege that Northgate sacrificed short-term profits by declining to accommodate a below-threshold customer at capacity-constrained facilities. To the contrary, Northgate's conduct was economically rational.
• The proposed relevant market is implausibly narrow, excluding obvious competitive substitutes such as cable broadband, fixed wireless access, and wholesale ethernet services. Under a properly defined market, Northgate's share falls to approximately 31% — far below the levels necessary to support an inference of monopoly power.
• The existence of comprehensive regulatory alternatives under the Communications Act — which Ridgepoint itself is actively invoking in a parallel FCC proceeding — further counsels against extending antitrust liability.
Defendants Northgate Telecommunications PLC and Northgate Networks America Inc. respectfully request that the Court grant the Motion to Dismiss and dismiss Ridgepoint's Complaint with prejudice.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe (VSB No. 48217) Howard Bellamy (admitted pro hac vice) Aaron Liu (VSB No. 93054) Monica Reyes (VSB No. 87621)
Calderwood & Harkness LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-4100 Facsimile: (202) 555-4101
Email: eforsythe@calderwoodharkness.com
450 Lexington Avenue, 35th Floor New York, NY 10017 Telephone: (212) 555-7800
Attorneys for Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.
Dated: November 14, 2022
CERTIFICATE OF SERVICE
I hereby certify that on November 14, 2022, a true and correct copy of the foregoing Memorandum of Law in Support of Defendants' Motion to Dismiss Plaintiff's Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) was served upon all counsel of record via the Court's CM/ECF electronic filing system, which will send a notification of electronic filing to the following:
Victoria Hargrove Daniel Stoyanov HARGROVE, WINSLOW & BURKE LLP 900 17th Street NW, Suite 600 Washington, D.C. 20006 Telephone: (202) 555-2300
Email: vhargrove@hwblaw.com
Email: dstoyanov@hwblaw.com
Counsel for Plaintiff Ridgepoint Communications Inc.
________________________________________
Elaine Forsythe (VSB No. 48217)
RIDGEPOINT COMMUNICATIONS INC.,
Plaintiff,
v. | Case No. 1:22-cv-01487-CMW
NORTHGATE TELECOMMUNICATIONS PLC and NORTHGATE NETWORKS AMERICA INC.,
Defendants.
Ashcroft v. Iqbal, 556 U.S. 662 (2009) | passim
Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) | passim
Thackeray Corporation v. Twombly, 550 U.S. 544 (2007) | passim
Westvale Holdings. v. Pemberton Corporation, 501 F.3d 297 (3d Cir. 2007) | 22, 28
Covad Commc'ns Co. v. Thackeray Corporation, 398 F.3d 666 (D.C. Cir. 2005) | 18, 19, 26
Calderon Industries v. Image Technical Services, Inc., 504 U.S. 451 (1992) | 24
Geneva Pharms. Tech. Corp. v. Barr Labs., Inc., 386 F.3d 485 (2d Cir. 2004) | 15
Goldwasser v. Ameritech Corp., 222 F.3d 390 (7th Cir. 2000) | 30
Hicks v. PGA Tour, Inc., 897 F.3d 1157 (9th Cir. 2018) | 16, 17
MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124 (9th Cir. 2004) | 18, 26
Morris Commc'ns Corp. v. PGA Tour, Inc., 364 F.3d 1288 (11th Cir. 2004) | 17
Novell, Inc. v. Kestrel Partners LLC, 731 F.3d 1064 (10th Cir. 2013) | 16, 17, 21
Pac. Bell Tel. Co. v. Greaves Corporation, 555 U.S. 438 (2009) | 15, 20
Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430 (3d Cir. 1997) | 25
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993) | 28
Todd v.