Court Declares IDT Liable to AT&T for Access Charges on Local Access Originated Prepaid Calls


On March 9, 2012, the U.S. District Court for the Northern District of Texas (“the Court”) ruled that IDT Telecom (“IDT”) was subject to access charge obligations after IDT had offered its customers Local Access Numbers (“LANs”) to access its calling card platform.  AT&T had filed suit against IDT, alleging that IDT through a “scheme” designed to “disguise long-distance calls as local calls,” purposefully and unlawfully evaded its obligation to pay “legally required” interstate access charges for calls originating on AT&T’s network.  In its ruling on the parties’ motions for summary judgment, the Court found that the access charge obligations in the FCC’s 2006 Prepaid Calling Card Order (“2006 Order”) applied to all prepaid calling card providers including those providers who utilize LANs.  The Court rejected IDT’s argument that the 2006 Order had only required access charges to be when paid for 8YY dialed calls and IP-enabled calling cards.  The Court also determined that the rating of locally dialed calls was possible and further ruled that even though IDT did not physically connect with AT&T’s network, IDT was liable for access charges since IDT had “constructively ordered” AT&T’s services through its existing agreements with CLECs.  AT&T’s lawsuit against IDT remains open and on course for trial on the issue of damages.

To request a copy of the Court’s Order, simply reply to this Advisory.

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