Verizon: Covad blamed us for DSL woes

The suit comes amid a legal and regulatory brawl between the two companies. Covad filed an antitrust suit against the New York phone company in 1999 and is a regular opponent in regulatory proceedings. Verizon is appealing the loss of a patent suit against Covad.

Verizon's suit, filed with the U.S. District Court for the Northern District of California in San Jose, says Covad managers instructed employees to deceptively shift blame to Verizon for many of the technical difficulties Covad has in providing its high-speed Internet service using digital-subscriber-line technology.

Covad's general counsel, Dhruv Khanna, denied that Covad invented complaints about Verizon's performance to cover up its own ineptitude.

"Our employees certainly were not instructed to blame Verizon for anything," said Khanna. "Their allegations have to be viewed in light of the fact that they are defendants in an antitrust suit. It's an attempt to intimidate and harass us."

Verizon's suit says ill-equipped, untrained and overscheduled Covad technicians were routinely told by supervisors to blame Verizon for problems even when Verizon clearly wasn't at fault. The regional Bell, which serves the Northeast, said Covad made more than 22,000 false reports of trouble with Verizon in 2000. The Baby Bell said it spent millions of dollars investigating the complaints, which, it said, "systematically disparaged" its reputation. It is seeking unspecified damages and an injunction.

Covad competes with the regional Bells in selling DSL service, but also depends on the Bells to provide the phone lines and network on which the service works. Covad has argued before regulators and in antitrust suits against Verizon and BellSouth Corp., that the Bells are trying to put competitors out of business by dragging their feet in filling orders and providing faulty phone lines.

Verizon's suit said former Covad employees told of being encouraged to exaggerate or invent complaints against Verizon in order to support Covad's legal and regulatory fights against the Bells. The suit also claims that Covad employees were under intense pressure to meet unrealistic sales and technical-support quotas in order to bolster the company's standing with investors.

"Management encouraged us in many subtle and not so subtle ways to blame the Bells first and ask questions later," one former Covad employee told Verizon's attorneys, according to the lawsuit.

Covad has been a regular opponent of Bell applications to provide long-distance service. The Bells must show regulators their home markets are open to competition before they can sell long distance. Covad and other Bell rivals have long accused the Bells of trying to thwart competition by stalling and overcharging.

Covad has regularly complained that Verizon doesn't install lines on time and installs lines that aren't suitable for carrying DSL. Verizon and other Bells say their performance is closely scrutinized by regulators and they have repeatedly proved that they provide good service.