RealTime IT News

Gateway Sues ISP Over Poor Service

Gateway is suing Web America Networks, the Internet provider that supplied Internet access the computer maker marketed under its name, for providing inadequate service.

The suit was announced late Tuesday. Gateway has already switched ISP partners and is now contracting with MCI/Worldcom's UUNet.

Gateway was the first major PC retailer to begin bundling Internet access with its services. Now the company claims in a suit filed in Delaware Chancery Court in Wilmington, Del., that Web America did not live up to its deal to provide Internet access. Gateway said its customers often complained of busy signals, frequent disconnections and problems accessing e-mail.

In a statement, John Von Holle, Gateway's director of software and Internet services, said UUNET was chosen for its reliability.

"We chose to work with UUNET because they continue to maintain the industry's most reliable, rigorously managed and most widely deployed network. We came to believe, after repeated discussions and performance evaluations, that Web America Networks cannot meet the standards for consistent and responsive reliability and performance that Gateway requires for its gateway.net clients." he said.

Gateway is seeking unspecified damages in the suit.

Philip Midkiff, WebAmerica's president, told InternetNews.com Gateway's complaints have nothing to do with the service's performance.

"It's clear they want to play the field as opposed to honoring this exclusive agreement. Being a PC seller doesn't mean you're an Internet visionary. Now, they're trying to figure out how to use this Internet capability to their advantage," he said.

Midkiff also disputed Gateway's claims that a number of its ISP customers have experienced connection problems.

"Our software was always constructed to roll (calls) over to multiple networks. We think that software gives customers the best performance. If I can route you to UUNet, MFS, IBM or my own network, you should have the best service," he said.

This is not the first time the two companies have gone to court. Web America sued Gateway on Jan. 8 alleging it misappropriated "trade secrets" on its pricing and business practices when talking to other Internet providers. Web America also accuses Gateway of defaming its reputation.

In its suit, Web America is asking for unspecified damages to recover lost business as well as unspecified punitive damages. It has also asked for a temporary restraining order to prevent Gateway from promoting any Internet service using Web America's trade secrets.

Gateway's competitors are making several ISP plays of their own, with Dell Computer Corp. announcing plans to offer DSL service to its customers in eligible areas. Compaq Computer Corp. also has similar deals.