SBC targeted in antitrust lawsuit
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The suit, filed Thursday in the U.S. District Court for CentralCalifornia, claims that the rate SBC charged the companies for digitalsubscriber line (DSL) service was too expensive for them to resellprofitably. Linkline Communications, Inreach Internet, Om Networks andRed Shift Internet Services are seeking $40 million in damages and adiscontinuation of alleged "price squeezing" from SBC, according to the court filing.
Attorneys for the California ISPs say San Antonio-based SBC must discontinue its pricing system in order to give smaller companies a chance to compete for DSL subscribers.
"Otherwise, (small ISPs) are doomed in the DSL business in long run, and SBC will acquire a complete monopoly of it," Maxwell Blecher of law firm Blecher & Collins said.
An SBC representative said the lawsuit is "nothing more than a re-hash of issues" raised two years ago by the California Internet Service Providers Association in a dispute, now amicably settled, that went before the Public Utilities Commission. "This (California) lawsuit's without merit," the representative said.
The lawsuit underscores an ongoing battle between the Baby Bells, which ownthe landlines that can carry DSL service, and smaller ISPs, which want apiece of the pie. Federal regulations require the phone giants--VerizonCommunications, BellSouth, SBC and Qwest CommunicationsInternational--to share the lines with third-party DSL serviceproviders, a rule that they have begrudgingly accepted.
Since the Baby Bells were deregulated as part of the Telecommunications Act of 1996, which requires them to sell data and voice-equipped lines in bulk to third parties, some
For their part, the local phone giants argue that federal regulationshave impeded the growth and deployment of their broadband services byrequiring them to open their gates to third parties. The regulation may havehelped the cable industry--which is not required to resell itsbroadband lines in bulk to outsiders--to make inroads into the boomingmarket in U.S. households for high-speed Internet services.
Competition between cable and phone companies is intensifying. Earlierthis week,
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