CenturyTel of Chatham, LLC v. Sprint Communications Co.
185 F. Supp. 3d 932
W.D. La.2016Background
- CenturyLink (multiple LEC affiliates) sued Sprint for $8.76M in unpaid access charges and sought fees and interest for VoIP-originated calls Sprint delivered for termination (Aug 2007–Oct 2011).
- Sprint received VoIP-originated calls from cable companies, converted them to TDM, and delivered them to CenturyLink over the same trunks as TDM calls; CenturyLink billed under federal and state switched-access tariffs that did not distinguish VoIP origin.
- From Aug 2007–July 2009 Sprint paid tariffed access charges without dispute; beginning July–Aug 2009 Sprint disputed VoIP charges, withheld payments, and paid an asserted $.0007/minute for VoIP traffic while applying retroactive offsets.
- CenturyLink filed tariffs with the FCC and state commissions and issued ASRs for switched access facilities used to deliver the calls.
- The FCC’s 2011 Comprehensive Reform Order changed VoIP intercarrier compensation rules prospectively (effective Jan 1, 2012) but did not resolve retroactive treatment.
Issues
| Issue | Plaintiff's Argument (CenturyLink) | Defendant's Argument (Sprint) | Held |
|---|---|---|---|
| Do federal access tariffs apply to VoIP-originated calls delivered by Sprint for termination before Jan 1, 2012? | Tariffs applied to switched access provided; CenturyLink billed under properly filed federal tariffs for all terminating calls regardless of origin. | VoIP calls were information/net protocol services not subject to per-minute access tariffs; at minimum calls were interstate and only subject to federal (lower) rates. | Federal access charges applied to VoIP-originated calls during the Dispute Period; judgment for CenturyLink on federal tariff claim. |
| Do state access tariffs apply, or are they preempted by federal law for VoIP-originated traffic? | State tariffs filed with commissions applied; FCC did not broadly preempt state regulation and allowed tariffing via federal or state tariffs. | FCC precedent (Vonage dictum) and other decisions support preemption, so only federal rates should apply. | State access tariffs are not preempted; CenturyLink entitled to state tariff rates (e.g., Missouri law supports intrastate treatment). Judgment for CenturyLink on state tariff claim. |
| Was Sprint’s withholding/self-help unlawful under 47 U.S.C. § 201(b)? | Sprint’s unilateral withholding of tariffed payments was an unjust and unreasonable practice; FCC prohibits self-help — recovery via pay-under-protest required. | Sprint relied on reasonable estimate and good-faith dispute to justify withholding/recoupment. | Withholding constituted unlawful self-help under §201(b); judgment for CenturyLink on this claim; no double damages but attorneys’ fees and prejudgment interest allowed. |
| Remedies and amounts awarded | CenturyLink sought unpaid access charges, late fees, interest, attorneys’ fees, and costs. | Sprint sought offset/recoupment of alleged overbilling and declarations. | Judgment for CenturyLink for $8,755,402.46 (access charges), late payment charges of $3,805,343.00 as of Feb 2, 2016 (plus accruals), and attorneys’ fees, costs, prejudgment interest; Sprint’s counterclaims dismissed. |
Key Cases Cited
- AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366 (1999) (background on the 1996 Telecom Act and local exchange regime)
- Global Crossing Telecomms., Inc. v. Metrophanes Telecomms., Inc., 550 U.S. 45 (2007) (private damages action under §201(b) and relation to FCC regulations)
- National Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (2005) (agency construction vs. prior judicial construction)
- Minn. Pub. Util. Comm’n v. FCC, 483 F.3d 570 (8th Cir. 2007) (review of FCC’s Vonage considerations and limits of preemption)
- Verizon N.Y., Inc. v. Global NAPS, Inc., 463 F. Supp. 2d 330 (E.D.N.Y. 2006) (framework for proving tariff claims)