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U.S. Supreme Court rules for Sprint in fees fight

Lawrence Hurley
People walk past a Sprint store in New York December 17, 2012. REUTERS/Andrew Kelly

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Tuesday ruled for a Sprint Nextel Corp subsidiary locked in a dispute with the utilities regulator in Iowa.

The high court said in a unanimous ruling that a federal district court can consider a lawsuit filed by subsidiary Sprint Communications Co challenging an Iowa Utilities Board decision even though the legal process in Iowa courts is not yet complete.

The dispute arose in 2009 when Sprint declined to pay access charges for its calls carried by Iowa Telecom - now Windstream Iowa Communications - that were transmitted over the Internet rather than the traditional phone network.

The Iowa Utilities Board, which regulates telecommunications in the state, said Sprint was required to pay.

Windstream had billed Sprint for access charges for the Internet calls, known as "voice over Internet protocol" or VoIP calls.

Sprint maintains that under the federal Telecommunications Act of 1996, VoIP calls are an "information service" not a "telecommunications service" and that therefore the company does not have to pay access charges.

Sprint challenged the utilities board decision in federal court and state court in 2011.

A federal judge and the St. Louis-based 8th U.S. Circuit Court of Appeals both said the state proceeding had to be completed first.

In Tuesday's ruling, written by Justice Ruth Bader Ginsburg, the Supreme Court said that the federal lawsuit could go ahead.

The case is Sprint v. Jacobs, U.S. Supreme Court, No. 12-815.

(Reporting by Lawrence Hurley; Editing by Howard Goller and Jonathan Oatis)