Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Friday, April 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Fight Over Pay-Phone Costs Gets Another Dime

(CN) - The 9th Circuit on Friday revived a dispute between a pay-phone service provider and a calling-card company over a complex payment formula for coinless pay-phone calls.

The heart of the matter is whether U.S. South Communications, a company that issues prepaid calling cards, is required to pay GCB Communications, a pay-phone service provider that owns public pay phones, for calls even if U.S. South did not receive coding information that indentifies GCB pay phones as having originated the calls.

The industry standard for indentifying a pay-phone service provider is the Flex-ANI software, which sends a particular pay phone's identification number to the calling-card provider when a call is made. For unknown reasons, sometimes the codes are not sent with a call. GCB argued that U.S. South should still have to pay for the complete call even if it received no information identifying the call as coming from a GCB phone.

After a bench trial in Arizona, U.S. District Court Judge Susan Bolton agreed with GCB based on her interpretation of the Federal Communications Commission's 1998 Payphone Order.

Bolton found that, according to the FCC regulation, once a pay-phone service provider creates a pay-phone line with Flex-ANI software, it is owed compensation for each complete call, even if the codes are not sent to or received by the card issuer. Bolton contended that the burden for tracking calls is on the carrier - in this case, U.S. South.

In reversing on Friday, the three-judge federal appeals panel in San Francisco found that the District Court failed to determine which party was at fault for the codes not being sent. The panel also found Bolton's interpretation of the FCC regulations to be flawed.

"The dispute in this case is over dial-around calls placed at GCB's payphones, but for which the Flex-ANI digits were not received by U.S. South," Judge Ferdinand Fernandez wrote for the panel. "While the parties argue over who erred regarding those digits, the district court saw no need to resolve that question because, in its opinion, it did not matter as long as GCB had made a provision for transmitting the Flex-ANI number, even if the number was not transmitted. We do not agree that the FCC's requirements can be read in that way."

The District Court "did not deem it relevant" to make findings about whether the Flex-ANI codes for the calls in question were sent into the system by GCB, Fernandez added.

"That question must now be decided," he wrote. "Therefore, we will vacate the district court's judgment and remand for further proceedings."

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.