Gateway sues Web America Networks

Gateway (NYSE:GTW) today announced that it has filed suit against Web America Networks, its Internet service provider for gateway.net, for "failure to meet the needs and expectations of Gateway and its customers." According to Web America's attorney, the lawsuit follows a breach of contract suit filed Jan. 8 by Web America against Gateway. The direct PC marketer also said it will drop Web America as its ISP and announce a new provider later today.

"We took this action to protect the interests of our customers and to ensure the service, quality, and reliability that consumers have come to expect from Gateway," said Jim Von Holle, Director of Software and Internet Services, Gateway 2000, Inc. "We came to believe, after repeated discussions and performance evaluations, that Web America Networks cannot meet the standards for consistent and responsive reliability and performance that Gateway requires for its gateway.net clients."

Gateway plans to announce an agreement with a new service provider later today.

Breach of contract
Milton Hammond, Web America's attorney, said that company sued Gateway for breach of contract and interfering with the execution of a contract in Dallas County District Court on Jan. 8, and characterized today's action by Gateway as a response to that suit.

Users of Gateway's service are being warned in an ad on the company's Web site that they must download an updated version of their Internet connection software to avoid an interruption of service.

Gateway, the first PC marketer to become a nationwide Internet Service Provider, launched gateway.net Internet service in 1997. Consumers who purchase Gateway computers can register for gateway.net accounts that include one email address, ftp access, 24-hour tech support, newsgroups, and full access to the World Wide Web.