SBC Communications Inc. has accused AT&T Corp. of fraudulently carrying long-distance traffic over facilities that were supposed to be used exclusively for routing local phone calls, and is seeking to recover $141 million in back-pay for access charges.
The RBOC filed the lawsuit a day after the FCC ruled AT&T must pay local phone companies access charges and comply with other rules even when it routes long-distance traffic over its Internet backbone network.
“... AT&T orchestrated and implemented a fraudulent scheme to avoid tariffed ‘access charges’ by delivering its long-distance calls for termination over facilities that AT&T obtained under the express condition that they be used for local traffic, and thereby disguising its long-distance calls as local calls,”
SBC alleged in papers filed with the U.S. District Court of the Eastern District of Missouri.
AT&T spokeswoman Claudia Jones says: “AT&T does not comment on pending litigation, but we believe that we have strong defenses, and we will defend vigorously.”
The FCC’s ruling April 21 marked a victory for SBC and the other regional Bells. AT&T had asked the FCC to declare that long-distance phone calls riding over an Internet network are not subject to telecommunications rules because they should qualify as so-called VoIP service — the calls today are classified as information services and therefore not subject to PSTN regulations. FCC commissioners disagreed with AT&T’s reasoning.
Internet-based phone service holds the promise of bringing new applications to the consumer and business markets, and as a result FCC Chairman Michael
Powell has pledged to apply light regulation to the technology. But the distinction between a regular phone call and VoIP is still fuzzy due to the lack of clearly defined regulatory parameters.
In a statement, Powell said the AT&T service should not be deregulated because the company is not providing consumers an enhanced service. “In fact, the consumer receives the same plain old telephone service,” Powell said. “To allow a carrier to avoid regulatory obligations simply by dropping a little IP in the network would merely sanction regulatory arbitrage and would collapse the universal service system virtually overnight.”
The FCC still has not decided how to regulate companies, such as Vonage Holdings Corp., that provide consumers with IP phone services over broadband connections. The calls ride over the Internet, but they frequently touch the heavily regulated legacy network controlled by local phone companies. Earlier this year, the FCC said Internet calls that completely circumvent the traditional phone network are not subject to telecommunications rules.
