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Gcb Communications, Inc., An Arizona Corporation, Dba Pacific Communications v. U.S. South Communications

April 29, 2011

GCB COMMUNICATIONS, INC., AN ARIZONA CORPORATION, DBA PACIFIC COMMUNICATIONS;
LAKE COUNTRY COMMUNICATIONS, INC., A MINNESOTA CORPORATION, PLAINTIFFS-APPELLEES,
v.
U.S. SOUTH COMMUNICATIONS, GEORGIA CORPORATION, DEFENDANT-APPELLANT, AND UNIDENTIFIED COMPANIES I THROUGH X, DEFENDANT.
GCB COMMUNICATIONS, INC., AN ARIZONA CORPORATION, DBA PACIFIC COMMUNICATIONS;
LAKE COUNTRY COMMUNICATIONS, INC., A MINNESOTA CORPORATION, PLAINTIFFS-APPELLEES,
v.
U.S. SOUTH COMMUNICATIONS, INC., A GEORGIA CORPORATION, DEFENDANT-APPELLANT,
AND UNIDENTIFIED COMPANIES I THROUGH X, DEFENDANT.



Appeal from the United States District Court for the District of Arizona Susan R. Bolton, District Judge, Presiding D.C. No. INC., a 2:07-cv-02054-SRB D.C. No.2:07-cv-02054- SRB

The opinion of the court was delivered by: Fernandez, Circuit Judge:

FOR PUBLICATION

OPINION

Argued and Submitted March 15, 2011-San Francisco, California

Before: J. Clifford Wallace, Ferdinand F. Fernandez, and Richard R. Clifton, Circuit Judges.

Opinion by Judge Fernandez

OPINION

U.S. South Communications, Inc. (U.S. South) appeals from the judgment entered against it and in favor of GCB Communications, Inc. and Lake Country Communications, Inc. (collectively GCB) after a bench trial. At issue is whether U.S. South was required to pay GCB for completed coinless payphone calls - dial-around calls - if U.S. South did not receive coding digits that would identify the calls as GCB payphone calls. We reverse and remand for further proceedings.

BACKGROUND

GCB is a payphone service provider (PSP), which owns public payphones. U.S. South is an issuer of prepaid calling cards. The disputed calls in this case were placed on GCB's payphones using U.S. South's calling cards.

When a coinless call is made on a payphone, it is initially received by the local exchange carrier (LEC) serving that geographic region. The LEC then passes the call to an interex-change carrier (IXC), and the IXC then routes the call to the carrier that completes the call (the "completing carrier," which in this case is U.S. South, a switch-based reseller (SBR)). For the calls at issue in this case that were completed by U.S. South, Level Three Communications (L3) was U.S. South's IXC. Federal Communications Commission (FCC) regulations require an SBR to compensate PSPs for completed calls that were placed on their payphones.*fn1 Dial-around calls are coinless calls placed at a payphone where the caller does not utilize the PSP's chosen long distance provider, and for which the PSPs receive no compensation from the caller. U.S. South is the completing carrier when individuals place calls using its prepaid calling cards. A call is deemed completed when the called party answers the telephone. As calls are routed through the telephone communications network, the various carriers in the call path exchange information so that each carrier knows what to bill for its contribution to the completed call.

U.S. South identifies which payphones were used to place calls with its calling cards by utilizing technology called "Flex-ANI." Every payphone is assigned an Automatic Number Identification (ANI), which is essentially its phone number. Flex-ANI is software that enables the LEC to determine whether a particular call was originated from a payphone by matching the ANI of the phone from which the call is made against a database of payphone ANIs. If the ANI is identified as a payphone ANI, the LEC, using Flex-ANI, will generate a two digit code of either 27, 29, or 70 and attach that code to the payphone's ANI at the LEC's switch. The codes are not actually attached to the ANI at the payphone itself. Flex-ANI has become the standard method for determining whether a call originated from a payphone.

In order for the system to function properly, the originating LEC and each subsequent carrier must have Flex-ANI capability. IXCs, like L3, have an obligation to provide all of the call data they receive at their switches, without manipulation, to SBRs, like U.S. South, including the Flex-ANI coding digits if received. If L3 does not receive Flex-ANI digits when the call is passed to it, neither will U.S. South.

When U.S. South completes a call, the data from that call is captured at its switch. If U.S. South receives a call with Flex-ANI coding digits identifying the call as having been placed on a payphone, it will add that call to a database used to determine dial-around compensation owed to individual PSPs, like GCB. If a call does not include the identifying digits, it will be discarded as not compensable. On a quarterly basis, U.S. South forwards its compensable call data ...


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