Federal Court Rules that VoIP Need Not Pay Access Charges

The U.S. District Court in D.C. ruled today that IP-originated calls are ​“information services” that are subject to the local reciprocal compensation scheme - and not access charges - for intercarrier compensation. The ruling came in Paetec Communications v. CommPartners, LLC, U.S. Dist Ct for DC, Civ. Action No. 08-0397. Paetec filed the case against CommPartners seeking to collect access charges for all calls, both TDM and VoIP originated. CommPartners conceded that it owed access fees on the TDM calls, but argued that VoIP calls are information services exempt from access under the FCC’s longstanding access charge exemption for such calls. The Court agreed. In reaching its opinion...

the Court came to some noteworthy conclusions. First, it found that IP-originated calls that terminate in TDM format are ​“information services” because they meet the ​“net protocol conversion” test. The Court stated that the FCC ​“has had the controversy on its docket for a decade, [but] has been unable to decide it.” But citing other court decisions on net protocol conversion, the court ruled that IP-to-TDM qualifies as an information service.

Next, the court concluded that reciprocal compensation applies, not Paetec’s access tariff. In reaching this conclusion, the court found that the ​“filed rate doctrine” did not overrule the statutory scheme that would apply reciprocal compensation rather than access to VoIP traffic. ​“A tariff cannot be inconsistent with the statutory framework”, the court said. Since the Court concluded that only one compensation scheme could apply under the statute - either access charges or reciprocal compensation - the law dictates that recip comp should apply to VoIP notwithstanding the filed tariff doctrine. Finally, the court rejected Paetec’s unjust enrichment and quantum meruit arguments because it found them inconsistent with the Communications Act’s ​“exclusive methods of intercarrier compensation”, a finding which the court said made those claims ​“statutorily barred.”