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EarthLink, Microworkz Battle Escalates

Just days after canceling its free Internet access deal with low-cost PC maker Microworkz, EarthLink Network Inc. filed a lawsuit against the company for allegedly violating a distribution agreement.

EarthLink late Monday announced it filed a lawsuit against Microworkz last Friday for failing to pay money it was owed under a deal that gave Microworkz PC buyers a year of free Internet access. EarthLink is asking for unspecified monetary damages. The arrangement gave customers who purchased Microworkz's $299 WEBzster computer free Internet access.

The ISP terminated the distribution agreement with Microworkz last Thursday after Microworkz said it was shelving its low-end PC for the iToaster. The iToaster is a set-top box similar to Microsoft's WebTV.

Microworkz quickly retaliated late Monday by announcing plans to file its own lawsuit against EarthLink. Microworkz maintains the ISP supplied faulty software and did not adequately train its technical staff on the terms of the deal.

Rick Latman, Microworkz's chief executive officer, said many of its customers have been frustrated in their dealings with EarthLink.

"Some customers have informed us that even after two months of trying to register with Earthlink, they are still not connected. In addition we have had customers complain about their treatment by Earthlinks service representatives, and in some cases, they are inappropriately being billed for what is supposed to be free."

Microworkz, now known as Microworkz.com Computer Corp., previously transformed from a software vendor to a hardware manufacturer, and now plans to change itself again into a complete Internet company.

In an effort to keep up with the newest Net trends, the PC manufacturer Friday announced it has added MP3, instant messaging services and Palm Pilot connectivity to its iToaster PC.