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Verizon’s Counterclaims in Local Fee Case Proceed

(CN) - A federal judge in San Diego allowed Verizon's counterclaim that the $1.3 million in "switched access" fees it allegedly owes a California carrier is based on "unfair and unreasonable" rates.

North County Communications Corp. accused Verizon of failing to pay in full for using local network infrastructure to connect long-distance calls. Verizon has allegedly racked up these "switched access" fees since 2006.

Verizon countered that North County's tariff was invalid after 2004, and some of the rates exceeded the cap set by FCC regulations. It also argued that the local carrier can't charge for service to chat-line operators or for service in West Virginia, because North County's affiliate in that state isn't licensed.

North County moved to dismiss the counterclaims for lack of subject-matter jurisdiction and failure to state a claim, but U.S. District Judge Roger Benitez allowed all but a contract counterclaim to proceed.

He rejected North County's claim that Verizon's challenge would be better addressed by the FCC, because the counterclaim seeks to impose uniform regulation on all similarly situated local phone companies.

Benitez said the counterclaims don't "require resorting to the specialized knowledge" of the FCC or state utilities regulators. Verizon has sufficiently pleaded its claims for excessive charges, unfair and unreasonable rates and practices, unjust enrichment and declaratory judgment, Benitez ruled.

But the breach of contract claim failed, the judge wrote, because Verizon declined to release details about the contract, citing a confidentiality provision.

"Verizon has not explained why it cannot plead, among other things, the nature of the contract, dates pertinent to the contract, and other relevant terms," Benitez wrote.

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