AT&T, Qwest block calls, file lawsuits in battle with LECs

AT&T Inc. and Qwest Communications International Inc. are embroiled in a legal tussle with several small local exchange carriers and Web companies over call termination fees, and so far have filed several lawsuits and even blocked wireless callers from using certain services such as free conference calls as a result.
AT&T appears to have kicked off the legal battle with a suit filed in late January, accusing several small companies of “deceitful and unlawful schemes through which AT&T is unlawfully billed exorbitant fees for call termination services that are not provided.”
As AT&T described the so-called scheme, the Internet companies run Web sites offering, for example, free international voice calls. Visitors to the site are given Iowa-based phone numbers from the local exchange carriers that then routes the calls through an international gateway, which, AT&T said, is co-located with the local switch of at least one defendant. The caller is prompted to enter the international number and the call then is routed out of Iowa to its international destination. Users pay only the long distance charges from their location to Iowa-which, given the widespread inclusion of nationwide long distance in wireless plans, usually is a free call.
“The ‘catch’ is that the ‘free’ international calling scheme can only exist if [the defendants] can require AT&T and other long distance carriers to fund it through terminating access charges for international voice calls that [they do] not, in fact, terminate,” said AT&T in its filing.
AT&T said that its access charges for Superior, Iowa-which had a population of 142 people living in 57 households according to the 2000 Census-went from a typical monthly rate of less than $2,000 per month to more than $2 million per month starting in mid-2006.
Qwest joined in the scuffle shortly after AT&T, filing a suit on Feb. 20 that essentially made the same claims. In its suit, Qwest expanded the issue to include free chat rooms, adult content calling, podcasts and voicemail.
Defendants in both cases include Superior Telephone Cooperative; The Farmers Telephone Co. of Riceville, Iowa; Interstate 35 Telephone Co. doing business as Interstate Communications Co.; Aventure Communication Technology L.L.C.; Futurephone.com L.L.C.; and Free Call Planet L.L.C. AT&T said it might name additional companies as their names became known. Qwest included Dixon Telephone Co.; Reasnor Telephone Co. L.L.C.; Audiocom L.L.C.; Fonpods Inc.; FreeConferenceCall Holdings Corp.; and Slone Group Inc.
The defendents could not be reached for comment.
After AT&T filed its lawsuit, four small companies operating out of Iowa, California, Nevada and Utah, including one that was named in the fraud lawsuits, sued AT&T for not paying access charges dating back to mid-2006. The suit demands AT&T pay more than $3 million “for services that it undisputedly received.”
The carriers said that AT&T has at least an eight-year history of refusing to pay small carriers for access services and that a “common law construct” known as the filed rate doctrine “requires a party that receives tariffed services to pay the filed rates, even if that party is dissatisfied with the rates or alleges fraud.”
Meanwhile, AT&T’s wireless division has begun blocking wireless calls placed to some of the Iowa phone numbers that provide the free conference calls.
“Within our terms of service, we’re very clear that wireless calling is meant to enable one person to call another one, not for one person to call a conference line,” said Mark Siegel, spokesman for AT&T’s Cingular. “Our terms of service also give us the right to block calls to certain numbers, and uses pretty wide latitude to do so.”
Siegel said that when calls are made to such “free” conference numbers, AT&T “has to pay terminating access for every minute that person is on the line,” and that the fees can go up exponentially because users spend more time on a conference call than they might if they were just talking to one other person.
“If left unchecked, it could certainly continue to add to our costs and impede our ability to provide great services at a fair price to all of our customers,” Siegel said.