Foley Secures Significant Appellate Victory for CenturyLink Against Sprint

Foley announced today it has secured a $23 million victory against Sprint in the United States Court of Appeals for the Fourth Circuit on behalf of 19 telecom carriers owned by CenturyLink that provide local telephone service in 18 states.

Sprint had refused to pay access charges for traffic originating on cable companies’ networks in Voice over Internet Protocol (VoIP). The April 29 federal appeals court decision affirmed the final judgment in favor of CenturyLink in the amount of $23,376,213.76 that had been entered in the U.S. District Court for the Eastern District of Virginia, Richmond Division, on December 29, 2011, after two trials and numerous motions filed by Sprint during more than two years of litigation.

“We are pleased that the Fourth Circuit has agreed with the district court that telecom carriers can enforce the provisions of their interconnection agreements in federal court without having to jump through regulatory hoops at the federal and state level,” said Michael J. Lockerby, partner and co-chair of the Washington, D.C. Litigation Department, who served as lead counsel for CenturyLink at the trial and appellate level. “This is an important decision for the telecom industry, because it allows carriers to enforce their interconnection agreements regardless of changes in the regulatory environment affecting intercarrier compensation in general and Internet traffic in particular.”

CenturyLink is the nation’s third largest telecommunications company. The dispute between the two carriers originated from intercommunication agreements (ICAs) formed under the Telecommunications Act of 1996. Avoiding telecom regulatory jargon, Foley attorneys presented the ICA dispute as a simple straightforward breach of contract claim.

At both the trial and appellate level, the federal courts in Richmond, Virginia rejected Sprint’s arguments that ICA disputes cannot be decided by federal courts until after they have been presented to the Federal Communications Commission (FCC) or state public utility commissions. Also, the decision affirmed that telecom carriers can enter into private contracts making access charges payable on traffic originating in VoIP format regardless of how the FCC has classified such traffic in the past or may rule in the future.

The Foley team representing CenturyLink led by Mr. Lockerby also included partner Bradley Jackson, senior counsel Jennifer Keas, associate Benjamin Dryden and paralegal Mary Ann Cochran.

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