magicJack Case Fueling More VoIP Access Charge Disputes

The FCC has been asked to rule on a disagreement between Verizon and Pac-West that offers a new twist on VoIP-related access charge disputes. Pac-West says Verizon has not been paying originating access charges from end users that use Pac-West for local phone service when they place calls to 800-series numbers to customers that use Verizon for those services. Okay, take a breath – it gets even more complicated.

Telecom Law Monitor, an online news offering operated by telecom law firm Kelley, Drye & Warren reports that Pac-West seeks a declaratory ruling that Verizon may not refuse to pay these access charges on the grounds that the call originated in IP format. The Telecom Law Monitor post notes that Pac-West “receives these calls, which are originated in VoIP format, conducts a database lookup to determine that the carrier is Verizon, converts the call to TDM format to hand-off to Verizon and then delivers the call to Verizon. For this, Pac-West bills its tariffed interstate access charges to Verizon.”

Verizon also has filed a petition which, according to Telecom Law Monitor, relies on recent cases involving YMax and Northern Valley Telephone Company to support its view that Pac-West’s tariff “violates FCC tariffing rules and thus is void.”

The YMax decision was one in which the FCC ruled that the company, whose affiliate offers the low-cost VoIP-based magicJack offering, was not entitled to collect terminating access charges to magicJack customers or for 800-number calls originated by magicJack customers. When that decision was made back in April, Telecom Law Monitor noted that the decision was a narrow one and that a key consideration was the fact that magicJack customers do not purchase services from YMax and YMax does not connect directly with the magicJack customers.

The Northern Valley Telephone Company case was one in which the FCC ruled that Qwest did not have to pay access charges to Northern Valley, a South Dakota CLEC, for calls to customers to whom Northern Valley offers free service. As the FCC noted in its decision, some of the entities to which Northern Valley terminates calls are conference calling companies that maintain conference bridges located in Northern Valley’s telephone exchange areas. Accordingly, the FCC noted that the proceeding “represents the latest chapter in the ongoing dispute between interexchange carriers and local exchange carriers involving ‘access stimulation.’”

In an apparent reference to the conference calling companies, which apparently offered conference calling for free, the FCC noted in its decision that “a CLEC’s ‘own end users’ do not include entities that receive free services from the CLEC. . . an ‘end user’ is a customer of a service that is offered for a fee.’”

Pac-West’s role in the Verizon dispute appears to be quite different from the roles of YMax or Northern Valley in their disputes, however. I don’t see any language in Verizon’s petition suggesting that Pac-West is not the service provider for the customers whose calls are involved in the dispute or that Pac-West is involved in access stimulation. Instead, Verizon’s complaint centers on the fact that Pac-West’s tariff did not include specific rates but instead directed Verizon to reference ILEC tariffs, which the CLEC said it would match or even undercut.

Verizon does note, however, that at some point it saw a sudden increase in the total access charges that Pac-West requested, which triggered the dispute. Why that increase would have occurred is not clear. The VoIP access saga continues …