A U.S. District Court in Silicon Valley Wednesday dismissed a lawsuit filed by Verizon Communications
against rival Covad Communications
Northern District of California Judge Jeremy Fogel said that Verizon’s suggestion that Covad falsified repair claims to boost its sales figures is “moot” and issued a ruling dismissing all of Verizon’s claims “with prejudice.”
Both companies provide DSL
Filed in June 2001, Verizon’s lawsuit alleged that Covad had purposely submitted more than 23,000 false “trouble tickets,” for problems it allegedly knew were not Verizon’s fault. Covad moved for summary judgment on all of Verizon’s claims.
“This is a significant victory for Covad,” Covad president and CEO Charlie Hoffman said in a statement. “We denied Verizon’s claims and are pleased we will no longer be burdened with the distraction and expense of this litigation.”
A Verizon spokesperson said the company was mulling the possibility of appealing the decision.
“It’s important to note that the courts did not say that Covad didn’t do what we said they did (issue false trouble tickets). We found two-dozen Covad employees that back our side of the story,” said Verizon spokesperson Jonathan Davies.
At one time, Covad’s technicians were instructed to open trouble tickets on all complaints without making any attempt to determine whether the problem was with Covad’s equipment or Verizon’s loops. Covad’s technicians also were instructed to close new orders regardless of whether the DSL was working; problems with such new service were referred to Verizon via trouble tickets.
The push to close orders was referred to internally as “March Madness” because employees who closed the most orders were promised tickets to the NCAA basketball Final Four tournament.
Since it is responsible for the integrity of the lines, Verizon said it was forced to send repair trucks to the site of alleged problems. According to Verizon, the false trouble tickets were part of a deliberate scheme by Covad to mask the fact that it was not making a profit as of 2000, even thought it claimed success in the industry by touting the growth of its customer base.
Covad is currently bouncing back from filing chapter 11 Bankruptcy.
Davies said the court basically dismissed this case because it had a better solution: a fee that Covad is supposed to pay if Verizon is called out to fix a problem that proves to be a false alarm, also known as a “customer misdirect.”
Covad filed an antitrust suit against Verizon in 1999 and is a regular opponent of the Baby Bells’ efforts to provide long- distance service.
A Covad spokeswoman said that suit is on appeal, and the company expects a ruling in the next six months.