ISPs File Antitrust Case Against SBC

Four small California Internet service providers have sued SBC Communications, charging the telecom with using anti-competitive practices to squeeze them out of the digital subscriber line market.

The action, by LinkLine Communications, Inreach Internet, Omsoft Technologies and Red Shift Internet Services, was filed in a Los Angeles federal court Thursday — shortly after SBC detailed strong DSL subscriber growth during its quarterly report.

The ISPs claim the Texas-based telecom has violated state and federal law, namely the Sherman Antitrust Act and California Unfair Business Practices statute. Federal law applies because the Internet carries data between states, they said.

“With DSL, where SBC has a stranglehold on the ‘last mile’ critical for deployment of the broadband technology, SBC suddenly has nearly all of the market,” said David Simpson, one of the plaintiff’s attorneys.

An SBC spokesman was not immediately available for comment.

The suit asks a judge to halt what it believes are illegal practices that have cost the companies customers, revenue and a reduction in the value of their business.

Though an exact amount of business lost because of SBC’s alleged practices is difficult to calculate, attorneys esimtate that it exceeds $40 million. The ISPs are asking a judge to triple the companies’ actual damages, add compensatory damages and force SBC pay its attorneys’ fees.

A trial date has not been scheduled yet.

Two years ago, SBC reached an agreement with a group representing 130 California ISPs over SBC’s DSL service practices.

That pact, which state regulators blessed, did not revolve around pricing, however, and did not preclude ISPs from future actions against SBC, Simpson said.

Earlier this week, SBC said it added 304,000 new DSL subscribers in its 13-state coverage area, pushing its total to 2.8 million.

Broadband service is a key part of its bundled services offering, which also includes long-distance and local phone service, wireless (through its Cingular joint venture) and, in the future, satellite TV through a partnership with EchoStar.