The California Public Utilities Commission (CPUC), the state's utilities regulator, directed Verizon Communications to pay $4 million in unpaidfees to Pac-West Telecomm. The fees are part of the 1996 Telecommunications Act, which aimed to deregulate the telecommunications industry. If a residential phone customer of Verizon, for example, were to call a local area business served by Pac-West, then Pac-West collects a fee from Verizon.
Local phone companies haveCongress against the fees and argue that reciprocal compensation is nothing more than a subsidy to their competitors. The Verizon vs. Pac-West dispute goes back to last August when Pac-West accused Verizon of underpaying its fees. A CPUC judge ruled for Pac-West in September, but Verizon filed a complaint over the decision, which the CPUC ruled against.