RealTime IT News

Judge Denies BellSouth Restraining Order

The U.S. District Court in Atlanta struck down a motion filed by BellSouth Corp. last week over charges of telemarketing abuses by one of its competitors.

Access Integrated Networks, a competitive local exchange carrier (CLEC) based in Macon, Ga., was accused of unethical sales practices in trying to get new phone customers in its coverage area. The CLEC doesn't have its own sales force, but instead outsources through independent sales agents and Internet service providers.

According to David Scobey, AIN's telemarketers allegedly used BellSouth's name and trademark to dupe customers to switch to the CLEC and will continue to monitor the company.

"BellSouth will continue to work closely with the courts and regulators to prevent similar practices from occurring," he said. "It is imperative that aggressive action be taken to ensure that customers are treated ethically and honestly by all service providers."

BellSouth's motion for a temporary restraining order and preliminary injunction was rendered "obsolete," said Judge Willis Hunt, after AIN suspended all its telemarketing operations.

Rodney Page, AIN senior vice president, said his company immediately took steps to remove the agencies responsible for the questionable telemarketing activities, though no mention was made of the companies involved.

"Our decision to correct the situation was acknowledged by Judge Hunt," he said. "We're pleased with the court's ruling and glad that this portion of the case is behind us now."

One day after BellSouth filed the motion with the courts, AIN officials suspended telemarketing operations by its contracted agents, saying an internal audit showed an "extremely small portion" of those operations were not in line with AIN's stated values and ethical standards.

Scobey said the motion, though rejected by the judge, achieved it's purpose of stopping AIN from deceptive practices.

"In effect, the court gave AIN a second chance to get its marketing practices under control," he said. "Let s hope they take advantage of it."

AIN officials, for their part, weren't entirely apologetic over the incident, an incident that would have likely caused a national furor if carried out by one of the four incumbent telephone companies in the U.S.

"We regret any missteps by this contract telemarketing firm, but we also regret the extreme overreaction by our competitor," Page said in a statement Aug. 6. "We see BellSouth's motion as totally without merit and reflective of their highly aggressive posture."

According to AIN officials, its phone subscriber base has doubled every year, since its launch in 1996 as a local and long-distance telephone carrier. In six years, the CLEC has garnered more than 100,000 customers and proved a viable competitor to BellSouth, the incumbent carrier in Georgia.

In related news, BellSouth executives were handed a class-action lawsuit on behalf of its shareholders, according to Dow Jones. The suit, filed by Milberg Weiss Bershad Hynes & Lerach LLP, charges BellSouth executives sold millions of dollars in stock before its July quarterly earnings report. The carrier's earnings fell below forecasts and BellSouth downgraded its own financial outlook; shares dropped 18 percent on the news.

It's been a bad month for BellSouth general counsel. On Aug. 2, the U.S. Court of Appeals in Texas ruled BellSouth could be tried as a monopolist under the Sherman Antitrust Act in a suit filed by Covad Communications.