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.

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