Lawsuit: Free chats cost Qwest a bundle

The regional telecom giant alleges that a rural phone company is offering Minnesota phone numbers to milk access fees from Qwest.

Minneapolis Star Tribune

Steve Alexander

February 24, 2010 - 10:43 PM

Is a free chat room for singles a bargain for romance or a telecom scheme to bilk Qwest?

Qwest Communications alleges in a new Minneapolis U.S. District Court lawsuit that it's a scheme. Qwest, a 14-state regional telephone company based in Denver, is suing Tekstar Communications of Perham, Minn., for alleged unfair competition.

Tekstar, which provides local phone service in more than a dozen rural northwestern Minnesota communities, said it has done nothing wrong.

Qwest's suit claims Tekstar drove up its volume of incoming long-distance calls from around the world -- and thus increased Qwest's network costs -- by offering Minnesota phone numbers that connect to free conference call and singles chat services located in other states.

The disputed Tekstar callers are automatically transferred to Free Conferencing Corp. of Long Beach, Calif., which provides business conference calls, and Audiocom LLC of Las Vegas, which offers singles chat rooms.

Qwest's suit is based on federal telecom regulations that require Qwest and other long-distance companies to pay "access fees" to a local telephone company to which they deliver long-distance calls. Because Tekstar's incoming long-distance call volume increased tenfold after it began offering the free conference call and singles chat services, the suit claims Qwest paid millions of dollars in "excessive" access fees to deliver the higher volume of long-distance calls.

In addition, the Qwest suit alleges that Tekstar used part of the Qwest money to illegally subsidize the conference calling and chat room services so they could remain free to the public. Qwest alleges that this helps the services continue to draw high levels of incoming long-distance calls for Tekstar.

The suit names TekStar, Free Conferencing Corp. and Audiocom, and seeks unspecified damages. A related complaint has been filed by Qwest with the Minnesota Public Utilities Commission, Qwest said.