Sprint sues rural phone, Internet firms in the US

US giant Sprint Nextel has sued 14 Iowa phone companies and dial-in service providers, alleging the rural carriers are striking illegal deals with conference and chat lines to boost long-distance call volume and inflate the charges they bill to the nation's big phone companies, an Associated Press report said.

The Associated Press report said the suit, filed in federal court in Iowa, is the latest salvo in a dispute between major telephone companies and their rural counterparts.

Sprint Nextel's lawsuit names many of the same defendants that have been sued over the same issue by AT&T and Qwest Communications, and which have countersued the big phone companies for withholding payment for long-distance calls by their customers to the services, the report added.

The Associated Press report further said a lawyer for some of the small companies named in the suit reiterated their position that their business activities are perfectly legal, and that federal regulators have rejected similar charges by the long-distance industry in the past.

Sprint, like the other major carriers, warns that the escalating costs of connecting the rural calls threatens to boost the cost of phone service for consumers everywhere, the report said.

The dispute centers on a complex system overseen by the government by which rural phone companies with relatively few customers are compensated for keeping their distant corners of the nation connected, the report further said.