On May 27, 2020, the 5th U.S. Circuit Court of Appeals ruled in favor of the local exchange carriers (LECs) in the Sprint and Verizon intraMTA disputes appeal. This judgement upheld the lower court’s decision issued in 2015 (See JSI’s November 23, 2015 e-Lert on this original ruling). In both proceedings, Sprint and Verizon claimed that intraMTA traffic routed via interexchange carriers (IXCs) on Feature Group D (FG D) trunks was not subject to access charges and sued hundreds of LECs to recover access charges paid on this traffic. LECs counter-sued Sprint, Verizon and Level 3 for withholding payment on access charges associated with intraMTA traffic.

The appeals court found that the service provided by the IXCs was not transit service for local traffic but was interexchange service subject to access tariffs and that the Filed Rate Doctrine applies. Companies that were involved in the dispute should determine if payments are due based on the 5th Circuit’s decision. Since the Filed Rate Doctrine was quoted, all sections of the tariff would apply, including late payment charges.

Sprint and Verizon were required to pay any outstanding balances prior to the appeals process, but late payment charges were not paid. This 5th Circuit ruling allows those late payment charges identified in 2017 court documents to be collected from Sprint and Verizon.

Level 3 did not pay its outstanding balances but has offered settlements, which some companies have accepted. If your company has not accepted an offer, you should now be able to collect from Level 3. Since Level 3 did not pay the outstanding balances, the late payment charges continue to accumulate.

The court also remanded to the FCC Sprint and Verizon’s request for declaratory ruling that once access charges move to bill and keep that there will be no reciprocal compensation on a going forward basis.

Note, if any part of the dispute and withheld amounts included interstate access or intrastate terminating access, those portions of the payments must be reported as an ICC revenue either to NECA or on the ICC revenue report.

If you have questions about these disputes or this latest court ruling, please contact Valerie Wimer at 301-459-7590.