The FCC has denied a formal complaint filed by Level 3 Communications, LLC (Level 3), now part of CenturyLink, alleging that AT&T Inc. and its price cap carrier subsidiaries (AT&T) violated the Communications Act of 1934 by filing tariff revisions that fail to comply with the intercarrier compensation rule in Section 51.907(g)(2). Specifically, Level 3 accused AT&T of assessing a required $.0007 per-minute tandem switched transport access service rate only when tandem switching and transport traffic terminates to an AT&T price cap carrier end office but not when such traffic terminates to the end office or equivalent facility of an AT&T affiliate that is not itself a price cap carrier. Among its allegations, Level 3 argued that AT&T’s tariffs charge a higher rate for traffic terminating with certain AT&T affiliates than for traffic terminating with an AT&T price cap carrier and the difference in charges for the same service renders the tariffs unreasonably discriminatory. The FCC disagreed, finding that the $.0007 per minute rate in Section 51.907(g)(2) applies only to tandem switching and transport traffic that terminates to a price cap carrier’s end office. The FCC stated that the most reasonable reading of the rule is that it applies only in situations where the price cap carrier is terminating traffic and the price cap carrier or its affiliate owns a tandem switch that the traffic transverses. The FCC therefore denied the complaint, concluding that the terminating carrier must be a price cap carrier, and not a non-price cap such as a CMRS or VOIP affiliate of AT&T.