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Qwest Communications Company, LLC v. Free Conferencing Corp.

United States District Court, District of Minnesota

March 5, 2015

QWEST COMMUNICATIONS COMPANY, LLC, a Delaware Limited Liability Company, d/b/a CenturyLink QCC, Plaintiff,
v.
FREE CONFERENCING CORP., et al., Defendants.

Charles W. Steese, John T. Osgood, and Sandra L. Potter, Armstrong Teasdale LLP, and Jason D. Topp, CenturyLink, Counsel for Plaintiff.

Martin S. Chester and Rhyddid Watkins, Faegre Baker Daniels LLP, and Stephen Wald, Partridge Snow & Hahn LLP, Counsel for Defendant Free Conferencing Corp.

Larry D. Espel, Green Espel PLLP, Counsel for Defendant Audiocom, LLC.

Gregory R. Merz, Gray Plant Mooty, Mooty & Bennett, PA, Counsel for Defendants Basement Ventures, LLC and Vast Communications, LLC.

Michael J. Davis Chief Judge

I. INTRODUCTION

This matter is before the Court on Motions for Summary Judgment by Defendants Audiocom, LLC, Basement Ventures, LLC and Vast Communications, LLC [Docket No. 276] and Defendant Free Conferencing Corporation [Docket No. 299]. The Court heard oral argument on February 6, 2015. Because the record is replete with disputed fact issues, the Court denies summary judgment.

II. BACKGROUND

A. Factual Background

1. The Parties

Plaintiff Qwest Communications Company, LLC (d/b/a CenturyLink QCC) ("Qwest") provides telecommunications services nationwide. It is also an interexchange carrier ("IXC") (i.e. a long-distance telephone carrier). Qwest delivered long-distance calls to phone numbers assigned to Defendants using Tekstar Communications, Inc. ("Tekstar").

Tekstar is a local exchange carrier ("LEC"), specifically a rural competitive local exchange carrier ("CLEC"), which provides telecommunications to approximately 11, 000 customers in rural Minnesota.

Defendants Free Conferencing Corp. ("FC"), Audiocom, LLC ("Audiocom"), and Basement Ventures, LLC ("Basement") are conference calling companies ("CCCs") who use Tekstar's services. Because Qwest alleges that Basement's contracts and traffic transitioned to Defendant Vast Communications, LLC, those two entities will be referred to collectively as "Basement."

2. Relationship between Qwest, Tekstar, and Defendants

Local calls originate and terminate within a designated local calling area, called an "exchange." Long-distance calls are typically carried by an IXC, such as Qwest, from the originating "exchange" (i.e. local calling area) to the terminating exchange.

Tekstar provides interstate and intrastate switched access services to IXCs, such as Qwest. Qwest's subscribers pay Qwest in order to use its long distance network to carry their calls from one local network to another within and between states. LECs route the calls on the originating end over the LEC's local telephone network to the IXC, which then routes the call over the LEC's local telephone network to the recipient based on the telephone number dialed.

Sometimes, IXCs hand the call off to a wholesale provider of long distance services when it is less expensive for another carrier to complete the call. LECs bill access charges to IXCs for the use of their local networks – both originating and terminating access charges. The LECs have monopoly control over calls to numbers in their local calling area.

For the purposes of this case, calls made to Defendants were delivered in one of three ways:

1. A Qwest customer makes a call to Defendants, which Qwest delivers to Tekstar, the LEC, who delivers it to Defendants;
2. A customer of another IXC makes a call to Defendants, which the IXC passes to Qwest, who delivers the call to Tekstar, who delivers the call to Defendants;
3. A Qwest customer makes a call to Defendants, which Qwest delivers to another IXC, who delivers the call to Tekstar, who delivers it to Defendants.

The last method is known as Least-Cost Routing ("LCR"), because it is cheaper for Qwest to use another IXC as an intermediary than for Qwest to deliver the call to Tekstar itself.

Both Qwest and Tekstar are telecommunications companies, subject to regulation by the Federal Communications Commission ("FCC") and Minnesota Public Utilities Commission ("MPUC"). Tekstar has filed tariffs with the FCC and MPUC, which it used to charge Qwest.

The present dispute between the parties centers around Tekstar's practice of charging Qwest switched access charges on calls made to Defendants.

Generally, the LEC at the origin of the call charges the IXC (Qwest) an originating switched access fee, and another LEC will charge a terminating switched access fee for calls that meet the tariff requirements. While those fees are typically less than 1 cent per minute, Tekstar charged Qwest 4.3 cents per minute for interstate calls and 7 cents per minute for intrastate calls, based on ...


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