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Competitors Rail Against Alleged SBC Abuses

According to its officials, an ever-expanding list of abuses has forced the Competitive Local Exchange Carriers (CLEC) Association of Michigan to file a complaint Friday over supposed unfair and monopolistic practices of SBC Communications and its subsidiary, Ameritech.

Rick Coy, general counsel for the Michigan organization at Clark Hill PLC, said the complaint to the Michigan Public Service Commission is the last resort of failed talks with the incumbent local exchange carrier (ILEC) to open up the telephone network to fair and competitive digital subscriber line (DSL) and telephone service.

"You always try to work something out with the carrier before going to the extent of filing a complaint like this, its always the last resort," Coy said. "Just by the fact that it had to be filed shows you that competitive carriers have exhausted all possibilities and are really wringing their hands in frustration in dealing with the incumbents on these issues."

The 500-page report poses a bevy of abuses against SBC and Ameritech, namely complaints of falsifying service and stifling advanced data services competition, like DSL, by providing poor service and support to its competitors. According to CLECA of Michigan officials, that's a violation of the 1996 Telecommunications Act, a piece of legislation that regulated the ILECs actions when dealing with competitors on its network.

Brad Kruse, president of the CLECA of Michigan and general counsel at SBC/Ameritech rival McLeodUSA, said a quick resolution is necessary to prevent the slide in regulatory enforcement.

"Companies are limited in the service they can provide in Michigan because of SBC/Ameritech's actions, and the pace of competition is slowing," Kruse said. "SBC/Ameritech is unilaterally setting telecommunications policy in Michigan, disregarding the rulings of regulators and the policies set by legislators alike, while blocking competition."

Competitive telephone carriers are asking for the Public Service Commission to approve the following:

  • An audit of SBC/Ameritech service reports; in the event of abuses, the association is asking the PSC to take measures to prevent future abuses
  • Ordering SBC/Ameritech to remove restrictions on broadband service options, namely providing DSL provisioning price incentives to competitors who agree not to provide local telephone services in that area.
  • Reopening anti-competitive telephone contracts with SBC/Ameritech business clients, without threat of penalties in the event they switch
  • Resume providing billing information to CLECs to properly bill their customers (In September, SBC/Ameritech stopped providing that information to CLECs, who had to guess at the amount to charge their customers).

Steve Kauffman, SBC spokesperson, downplayed the severity of the charges, saying the charges are unsubstantiated and that competitors make up roughly 16 percent (or 1.1 million for SBC/Ameritech's five million lines served) of the telecommunications industry in Michigan.

"What we can see from the file -- we haven't seen the full report yet -- is that we don't see any facts or any evidence to support this (complaint)," Kauffman said. "What we have shows that the competition in Michigan has increased 60 percent every year.

Kauffman added that independent auditing firm KPMG has been reviewing SBC/Ameritech activities the past month as part of its bid to apply for long distance services in Michigan early next year. No mention was made of KPMG findings.

Coy said the filing is a long time coming, a process that had to be cut short because competitive carrier complaints kept stockpiling and the resolution process at the PSC is, by nature, very time consuming.

"What we've found is that more and more carriers had more and more issues to raise and we had to just group it into a dozen or so areas or we would never have gotten it completed," he said. "Generally, Michigan PSC has a good track record. It's a problem of the timetable between the way government works and the way business works. The marketplace goes very, very fast while government policy and decisions are made at a very methodical pace, so they don't match up very well."

Friday's complaint is the latest in a raft of complaints filed by SBC competitors around the nation. Many claim the nation's second largest Bell is slowly and methodically squeezing the competition out of its market using stalling tactics at the Federal Communications Commission and at the state public utilities commissions and PSC, where telecommunications standards are enforced.

Last month, talks between an association of California Internet service providers and SBC/Pacific Bell collapsed after SBC filed for non-dominant carrier status with the state PUC. If allowed to move forward as a non-dominant carrier, SBC would be able to provide long-distance telephony services in the state, despite its control of 70 percent of the DSL services there.

Critics at the California ISP Association broke off talks abruptly after the SBC announcement and reminded California PUC officials of its pending complaint against the ILEC.

Earlier this year, advocate group CompTel sent a letter to the FCC asking it to look into false testimony provided by SBC in its bid to provide long distance telephone service in Kansas and Oklahoma.