Phone scheme cost it millions, Qwest alleges
Calls were routed illegally, it says in Iowa lawsuit
By Jeff Smith
Rocky Mountain News
Friday, February 23, 2007
Qwest Communications claims it has lost millions of dollars due
to an illegal phone call routing scheme created by rural Iowa
telcos and companies that advertise free adult chat and
international calling services. Seven independent telcos in
Iowa are being sued, along with a half-dozen companies that
allegedly operated such sites as hotlivesexchat.com,
freeconference.com and callchinaforfree.com.
Qwest filed suit in federal court in Iowa this week in an effort
to get its money back and stop the companies from engaging in
the allegedly fraudulent practice.
The scheme, which involves routing calls in such a way that
long-distance carriers pay the call termination fees, has
emerged in recent months. AT&T recently filed a similar $2
million lawsuit in Iowa.
Qwest doesn't disclose in the lawsuit exactly how much money it
But Qwest executives indicated earlier this month that
"untoward" and "inappropriate" traffic on its network had cost
the company $10 million to $15 million.
The defendants include Superior Telephone Cooperative, Dixon
Telephone Co., Great Lakes Communication Corp., Future Fone
Services Inc. and Free Call Planet LLC. None of the defendants
could immediately be reached for comment.
Qwest spokesman Bob Toevs said the Denver telco doesn't comment
about pending litigation.
Qwest claims in its lawsuit that many of the companies make
false and misleading statements about how they can provide
"free" services, with some Web sites saying tax dollars are
paying for the calls.
Many of the telephone companies named in the lawsuit serve small
communities yet have thousands of access lines assigned to them,
As an example of the issue, Qwest said it delivered 15,000
minutes of long-distance calls to Superior's 175 customers in
June. In November, Qwest said that traffic increased to 6.4
million minutes of long-distance calls.
Qwest CEO Dick Notebaert said in a conference call this month:
"We've fixed the systems now so that I can tell you that if we
get a little spike like we did from some spots . . . we can
immediately block it."
smithje@RockyMountainNews.com or 303-954-5155