AGIS files against WorldCom
Apex Global Internet Services Inc. Wednesday filed a motion for a temporary restraining order and preliminary injunction against WorldCom (WCOM), charging that the telecommunications company -- currently involved in a proposed deal to merge with long-distance and Internet giant MCI Communications (MCIC) -- tried to drive AGIS out of business.
"It's our opinion that WorldCom was basically trying to eliminate its competition," said AGIS representative Jason Delker. "We feel there's several laws they're breaking, including the Sherman (antitrust) Act."
The Dearborn, Mich.-based AGIS, also a backbone provider, carries traffic across a combination of its own infrastructure and circuits leased from Jackson, Miss.-based WorldCom.
The motion, submitted to the U.S. District Court for the Eastern District of Michigan, Southern Division, charges that WorldCom "continually harassed, delayed, terminated, cancelled, manipulated, discriminated, processed 'incorrectly,' acted arbitrarily, mislocated, improperly maintained procedures ... and generally acted in bad faith and inapposite of any standard and customary business practice and caused AGIS to have diminished sales and further irreparable harm."
AGIS's argument claims that WorldCom has an "apparent stranglehold on the Internet and telecommunications industry."
WorldCom's proposed $38 billion merger with MCI has come under heavy criticism, mostly from other telephone companies. GTE (GTE) claims that the merged company would carry upwards of two-thirds of all Internet traffic.
According to AGIS's motion, in addition to alleged service problems with WorldCom, the top-tier backbone intends to suspend service to circuits AGIS has ordered from WorldCom, because of a payment dispute. That would result in AGIS breaking several service contracts, AGIS says.
Telecom strategies analyst David Cooperstein, of Forrester Research Inc., agreed AGIS would be hard-pressed to find another carrier to provide bandwidth to its customers in the short term, because of intense bandwidth demands. But he said AGIS should have had a backup carrier in place as a precaution.
"If they're dependent on WorldCom for their only access point, then they ran the risk before of a technical breakdown. And now there's a legal breakdown," Cooperstein said.
Delker alleges WorldCom's actions, which he claims include installation delays, service problems and payment inaccuracies, have already caused irreparable damage. "Not only has it hurt us financially, but what it has done to our reputation is even at a greater level," Delker said.
He said AGIS's immediate intent in filing the motion is to get WorldCom to "turn up," or connect, several circuits already ordered by AGIS so that the company can maintain normal operations. The court could hold a hearing on the motion as early as Monday.
WorldCom representatives declined to comment.