Centurytel of Chatham, LLC v. Sprint Commc'ns Co.

• Decision Date: 04 May 2016
• Docket Number: CIVIL ACTION NO. 09-1951
• Citation: 185 F.Supp.3d 932
• Court: U.S. District Court — Western District of Louisiana
• Parties: Centurytel of Chatham, LLC, et al. v. Sprint Communications Company, L.P.

185 F.Supp.3d 932

Centurytel of Chatham, LLC, et al.

v.Sprint Communications Company, L.P.

CIVIL ACTION NO. 09-1951

United States District Court, W.D. Louisiana, Monroe Division .

Signed May 4, 2016

Benjamin Dryden, Jarren Neil Ginsburg, Michael J. Lockerby, Foley & Lardner, Washington, DC, Mark A. Mintz, Edward H. Bergin, Jones Walker et al, New Orleans, LA, for Centurytel of Chatham, LLC, et al.

Glenn M. Farnet, Gordon D. Polozola, Kean Miller et al, Baton Rouge, LA, Andrew M. Carlson, Philip R. Schenkenberg, Briggs & Morgan, Minneapolis, MN, Scott L. Zimmer, Kean Miller, Shreveport, LA, for Sprint Communications Company, L.P.

OPINION

ROBERT G. JAMES, UNITED STATES DISTRICT JUDGE

This action was initiated by Plaintiffs CenturyTel of Chatham LLC; CenturyTel of North Louisiana LLC; CenturyTel of East Louisiana, LLC; CenturyTel of Central Louisiana, LLC; CenturyTel of Ringgold, LLC; CenturyTel of Southeast Louisiana, LLC; CenturyTel of Southwest Louisiana, LLC; CenturyTel of Evangeline, LLC; CenturyTel of Missouri, LLC; Mebtel, Inc.; CenturyTel of Idaho, Inc.; Gallatin River Communications, LLC; CenturyTel of Northwest Louisiana, Inc.; CenturyTel of Lake Dallas, Inc.; CenturyTel of Port Aransas, Inc.; CenturyTel of San Marcos, Inc.; Spectra Communications Group, LLC; CenturyTel of Arkansas, Inc.; CenturyTel of Mountain Home, Inc.; CenturyTel of Redfield, Inc.; CenturyTel of Northwest Arkansas, LLC; CenturyTel of Central Arkansas, LLC; CenturyTel of South Arkansas, Inc.; CenturyTel of North Mississippi, Inc.; Gulf Telephone Co.; CenturyTel of Alabama, LLC; CenturyTel of Adamsville, Inc.; CenturyTel of Claiborne, Inc.; CenturyTel of Ooltewah Collegedale, Inc.; CenturyTel of Ohio, Inc.; CenturyTel of Central Indiana, Inc.; CenturyTel of Odon, Inc.; CenturyTel of Michigan, Inc.; CenturyTel of Upper Michigan, Inc.; CenturyTel of Northern Michigan, Inc.; CenturyTel Midwest Michigan, Inc.; CenturyTel of Wisconsin, LLC; Telephone USA of Wisconsin, LLC; CenturyTel of Northern Wisconsin, LLC; CenturyTel of Northwest Wisconsin, LLC; CenturyTel of Central Wisconsin, LLC; CenturyTel of Midwest Kendall, LLC; CenturyTel of Midwest Wisconsin, LLC; CenturyTel of Fairwater Brandon Alto, LLC; CenturyTel of Larsen-Readfield, LLC; CenturyTel of Forestville, LLC; CenturyTel of Monroe County, LLC; CenturyTel of Southern Wisconsin, LLC; CenturyTel of Minnesota, Inc.; CenturyTel of Chester, Inc.; CenturyTel of Postville, Inc.; CenturyTel of Colorado, Inc.; CenturyTel of Eagle, Inc.; CenturyTel of the Southwest, Inc.; CenturyTel of Gem State, Inc.; CenturyTel of Montana, Inc.; CenturyTel of Wyoming, Inc.; CenturyTel of Oregon, Inc.; CenturyTel of Eastern Oregon, Inc.; CenturyTel of Washington, Inc.; CenturyTel of Cowiche, Inc.; and CenturyTel of Inter-Island, Inc., all of which are entities incorporated and doing business in various states as local exchange carriers.¹ (Plaintiffs will be referred to hereinafter as "CenturyLink"). CenturyLink brought this action against Defendant Sprint Communications Company, L.P. ("Sprint") to collect money damages, costs, and attorneys' fees based on Sprint's refusal to pay $8,755,402.46 to CenturyLink in access charges under the federal and state tariffed rates for the termination of voice over internet protocol traffic to CenturyLink's local exchange customers and subsequent use of self help to recoup amounts previously paid to CenturyLink. Sprint responded by asserting counterclaims seeking a judicial declaration and other relief, including attorneys' fees. Sprint sought a declaration that it had no obligation to pay the federal and state tariff rates. In the alternative, Sprint sought a declaration that, if the voice over internet protocol calls were telecommunications services, they were jurisdictionally interstate and compensable only at the federal tariff rate.

A bench trial was held in this matter on February 2-3, 2016. The Court took the case under advisement. The parties submitted initial post-trial briefs on March 24, 2016 [Doc. Nos. 206 & 207] and response briefs on April 7, 2016. [Doc. Nos. 208 & 209].

The Court hereby enters the following findings of fact and conclusions of law. To the extent that any finding of fact constitutes a conclusion of law, the Court hereby adopts it as such, and to the extent that any conclusion of law constitutes a finding of fact, the Court hereby adopts it as such.

I. FINDINGS OF FACT

Sprint is a limited partnership organized under the laws of the State of Delaware and with its principal place of business in Kansas. Sprint acts as a telecommunications carrier providing telecommunications services as a common carrier² and as an interexchange carrier ("IXC"). It is Sprint's role as an IXC that is at issue in this case. An IXC is "a telephone company that provides telephone toll service. An [IXC] does not include commercial mobile radio service providers as defined by federal law." 47 C.F.R. § 64.4001(d).

During the relevant time period of August 2007 to October 2011 ("the Dispute Period"), Sprint delivered traffic or calls³ originating from both TDM (time division multiplexing) and VoIP (voice over internet protocol) technology⁴ to CenturyLink, which then transmitted and delivered the calls to end users on CenturyLink's local exchange networks. The parties' dispute is limited to the VoIP-originated calls.⁵

Beginning in 2004, Sprint entered into wholesale contracts with various cable television companies to deliver (or "terminate") their customers' calls to telecommunications networks across the country, including CenturyLink's local exchange carriers ("LECs"). VoIP technology is commonly used by cable companies to provide voice services to their subscribers, so that they can make and receive calls. Cable company subscribers make VoIP-originated calls by speaking into analog phones. The phones convert their speech into data packets. The phones are connected to internet protocol ("IP")-compatible multi-media terminal equipment ("MMT") at their locations. The MMT sends the data packets out as IP. Because there was IP and a data connection, cable customers could obtain other services, including a do not disturb feature, caller ID on the subscriber's television screen, and the ability for incoming calls to ring on their home telephone and another designated telephone (e.g. cell phone) at the same time. However, all of these additional services are available only at the subscriber's location, that is, for incoming calls.

In its role with the cable companies, Sprint converts the VoIP-originated calls to TDM using a soft switch, which is a voice switch that has the ability to operate interiorly with an IP network and handle VoIP traffic and to also do a protocol conversion of that VoIP traffic to TDM. Sprint then uses a trunk (the connection between two switches) to deliver the calls to CenturyLink and other LECs in TDM.

CenturyLink must then deliver the calls to the end users, its customers. Sprint pays "access charges" or tariffed charges to CenturyLink for providing this so-called switched access services, i.e., delivering the voice calls to its subscribers/end users/customers.⁶ Sprint delivers both local and long distance calls to CenturyLink. Because CenturyLink had properly filed with the Federal Communications Commission ("FCC") one or more tariffs for the provision of interstate switched access service, its federal tariffs were legally binding during the Dispute Period. Its state tariffs were also legally binding because CenturyLink had also filed one or more tariffs for the provision of intrastate switched access service with the respective state public utility commissions where the LECs operated.

The federal and state tariffs set the rates and terms for "terminating access service." Tariffs generally specify certain information that the customer must provide to complete a request for service, so that it is possible for the carrier (that is, CenturyLink) to determine the tariff under which the carrier's facilities are provisioned and billed. The information provided did not include the origination of the call.

During the Dispute Period, CenturyLink made no distinction based on the form in which calls originated. Prior to January 2012, CenturyLink's Federal and State Access Tariffs did not require CenturyLink's customers to specify whether the calls originated in VoIP or any other format, and Sprint was charged the same rates for TDM- and VoIP-originated calls. Sprint delivered calls to CenturyLink's LECs in TDM, regardless whether the calls originated in TDM or VoIP, and the calls came across the same facilities. The VoIP-originated calls were thus in the same format as and intermingled with traditional TDM-originated calls. Before July 2009, Sprint did not identify the portion of the traffic delivered to CenturyLink that originated in VoIP, and CenturyLink provided Sprint with industry-standard signaling and call detail information, which did not identify the format in which a call was originated. The calls Sprint delivered to CenturyLink and which CenturyLink terminated to its subscribers during the Dispute Period used the same CenturyLink equipment and processes regardless of whether the call originated in TDM or VoIP.

CenturyLink billed Sprint the per minute access charges that are set forth in the Federal and State Access Tariffs for calls it delivered, including VoIP-originated calls. Prior to August 2009, Sprint never provided CenturyLink with the exact or estimated minutes of VoIP-originated calls that it was delivering to CenturyLink for termination. Instead, Sprint paid the federal and state access charges to CenturyLink, without dispute, for both TDM- and VoIP-originated calls.

Beginning in July 2009, as invoices came due for payment, Sprint filed written disputes with CenturyLink for charges that Sprint calculated as associated with cable company calls that had originated in VoIP. Sprint disputed the access charges assessed on VoIP-originated calls that...