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Strange Bedfellows?: Verizon Says Sprint Shouldn’t Have to Pay CenturyLink $12.5 Million

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Maybe Jamie Foxx and his double from Sprint can get along after all.

Verizon has come to Sprint’s defense by asking an appellate court to nullify a lower court decision in a case brought by CenturyLink.

U.S. District Judge Robert James issued a decision siding with CenturyLink and ordered Sprint to pay $12.5 million in fees to the local units of the telecommunications company after Sprint refused to pay fees for connecting VoIP calls to local networks.

James’ decision favored CenturyLink’s claims that Sprint was obligated to pay federal and state telecommunications taxes for the use of local telephone network facilities to complete long-distance calls, according to Law360.

CenturyLink said Sprint violated the Communications Act by unilaterally lowering the rate it would pay for connecting VoIP calls to CenturyLink’s local telephone networks to 7 cents per minute. Sprint said that it used a “self-help” means of recovering the difference between 7 cents per minute and the charges previously paid to CenturyLink.{ad}

In its brief to the U.S. Court of Appeals for the Fifth Circuit in support of Sprint, Verizon said the Federal Communications Commission has consistently held that a customer that fails to pay what it owes under a carrier’s tariff does not violate the Communications Act, even when that customer is a carrier. That is why carriers cannot file complaints at the FCC seeking to collect unpaid amounts billed under tariffs, it said.

The FCC has jurisdiction to adjudicate claims that a carrier has violated the Communications Act, but not claims that a carrier-customer has violated a carrier-provider’s tariff through non-payment, according to Verizon.

“The district court’s decision not only conflicts with on-point FCC precedent, but also is contrary to standard practice within the communications industry,” Verizon said in its brief. “A carrier-customer often withholds payment on current invoices in order to offset its past payment of earlier-invoiced tariffed charges that it later disputes. Verizon does so as a carrier-customer purchasing tariffed services; its carrier-customers do the same when they dispute charges Verizon bills under its own tariffs. The decision … would upset that well-settled practice and create considerable uncertainty in the communications industry.”

In response to Verizon’s brief, CenturyLink said the telco provides no substantial evidence to back its claims.

“‘Standard” or not, such ‘self-help’ has been uniformly condemned by the FCC, state public utility commissions, and at least one other U.S. Court of Appeals,” CenturyLink said. “The questions of law to be decided by this court have nothing to do with whether the district court’s award of attorneys’ fees in this case would ‘disrupt well-accepted practices in the communications industry.'”


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