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DC Circuit Vacates FCC OTT VoIP Order on End Office Access Charges

By Jamie Troup on November 21, 2016
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A recent D.C. Circuit Court decision may significantly impact the access charges billed by over-the-top VoIP carriers.

In 2015 the Commission issued a declaratory ruling (In re Connect America Fund, 30 FCC Rcd. 1587 (2015) regarding the classification of end office local switching when internet service providers (“ISPs”) collaborate with over-the-top VoIP providers to complete interexchange calls. AT&T didn’t like what the FCC came up with and asked the D.C. Circuit to weigh in. The court has now vacated and remanded the declaratory order so the Commission might clear up its “muddled treatment” of the term “functional equivalence”.

The court decision reduces the revenue that over-the-top VoIP service providers receive from long distance carriers like AT&T when the VoIP carrier completes a long distance call for the long distance carrier. Instead of receiving payment of an end office switching rate, over-the-top VoIP service providers will receive payment of a tandem switching rate, which is generally much lower.  

After applying the FCC’s functionally equivalent test, the court held that the FCC had failed to identify functions performed by the VoIP carriers that were functionally different from tandem switching and unique to end office switching. In vacating the FCC decision allowing VoIP carriers to charge for end office switching, the court has limited over-the-top VoIP carriers to billing for tandem switching instead.

 

Photo of Jamie Troup Jamie Troup

Mr. Troup has more than 30 years of experience in representing corporations in complex commercial litigation, dispute resolution, and government investigations. He has tried cases in state and federal courts, before numerous state and federal regulatory agencies, and in arbitrations. Mr. Troup regularly…

Mr. Troup has more than 30 years of experience in representing corporations in complex commercial litigation, dispute resolution, and government investigations. He has tried cases in state and federal courts, before numerous state and federal regulatory agencies, and in arbitrations. Mr. Troup regularly litigates cases on a broad range of matters, including allegations of breach of contract, business torts, billing disputes, government audits and investigations, constitutional violations, federal preemption, non-payment of tariff rates, ratemaking, network interconnection, appeals of adverse regulatory state and federal agency action, spectrum auctions, and tower zoning.

Representative matters include:

  • Currently prosecuting claims exceeding $200 million against AT&T and Sprint for their failure to fully pay for services rendered. See Iowa Network Services, Inc. v. AT&T Corp., Case No. 3:14-cv-03439-PGS-LHG (D. N.J.) and Iowa Network Services, Inc. v. Sprint Communications Co., Case No. 4:10-cv-00102-JEG-RAW (S.D. Iowa).
  • Obtained dismissal of all claims that the defendant had violated the state and federal antitrust laws by obtaining an exemption for the defendant under the Parker Doctrine. Northwestern Bell Telephone Co. v. Iowa Utilities Board, 477 N.W.2d 678 (Iowa 1991).
  • Secured dismissal of a multimillion dollar nationwide class action and established important precedent holding that a telecommunications carrier is not liable for violations by its customers of the Telephone Consumer Protection Act. Clark v. Avatar Technologies Phl, Inc., Case No. H-13-2777 (S.D. Texas 2014).
  • Successfully defended a telecommunications carrier during a federal government investigation and on-site audit. The defendant was found innocent and no refunds of any amounts were required. In re Sealed Case, No. 98-1474, 1999 U.S. App. LEXIS 11006 (D.C. Cir. 1999); see also, AT&T v. Jefferson Telephone Co., 16 FCC Rcd. 16130 (2001).
  • Represented a telecommunications carrier In a suit against the U.S. Government, and successfully obtained a stay of the FCC’s $10 billion auction of personal communications service (“PCS”) spectrum licenses from the U.S. Court of Appeals on the grounds that the government’s auction rules were discriminatory in violation of the Equal Protection Clause of the U.S. Constitution. Telephone Electronics Corp. v. FCC, Case No. 95-1015 (D.C. Cir. 1995). This case is the first and only court stay of an FCC license auction.
  • Challenged a zoning decision under the federal civil rights laws that had prevented the plaintiff from constructing a tower to provide wireless telecommunications services. A settlement was reached permitting the tower’s construction. Epic Touch Co. v. City of Guymon, Case No. CIV-00-1685 (W.D. Okla. 2000).
  • Obtained for the defendant, the dismissal of a collection action in California federal district court, and following that dismissal, also successfully dismissed the identical complaint that was filed with the FCC. This case established important precedent regarding the respective jurisdictions of the federal courts and federal agencies. U.S. TelePacific Corp. v. Tel-America, Case No. CV-03-8972GAF (CTX) (Cen. D. Cal. 2004); see also, In the Matter of U.S. TelePacific Corp. v. Tel-America of Salt Lake City, Inc., 19 FCC Rcd. 24552 (2004).
  • Prosecuted a lawsuit on behalf of a local telephone company against a long distance carrier for non-payment of telecommunications services that established important precedent regarding application of the Communications Act’s statute of limitations and issue preclusion. Central Scott Telephone Co. v. Teleconnect Long Distance Services and Systems Co., 832 F. Supp. 1317 (S.D. Iowa 1993).
  • Successfully litigated a complaint that resulted in an FCC order prohibiting Southwestern Bell Telephone Company from charging the plaintiff rather than meet point bill other carriers for the transport of SS7 signaling. Elkhart Telephone Co. v. Southwestern Bell Telephone Co., 11 FCC Rcd. 1051 (1995).
  • Procured a jury verdict eliminating all refund claims. Northwest Iowa Telephone Co. v. Qwest, Case No. 04-cv-4053-DEO (N.D. Iowa 2006).
  • Obtained favorable settlements in several billing disputes. See e.g., RCC Holdings, Inc. v. Rural Telephone Service Co., Case No. 04-2311-KHV-DJW (D. Kan. 2004); AT&T v. Reasnor Telephone Co., Case No. 4:07-cv-00117-JEG-RAW (S.D. Iowa 2007); McClure Telephone Co. v. AT&T Communications of Ohio, Inc. and Sprint Communications Co., Case No. 3:08-cv-2800 (N.D. Ohio 2010); Readlyn Telephone Co. v. AT&T Corp., Case No. 08-5449 (GEB) (D. N.J. 2009).
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  • Posted in:
    Technology and AI
  • Blog:
    CommLawBlog
  • Organization:
    Fletcher, Heald & Hildreth, PLC
  • Article: View Original Source

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