Bellsouth Looting Competitors?

Hurricane Katrina took down power lines across the Southeast and left hundreds of customers without phone service for weeks. Some customers also say that the telephone company Bellsouth has taken advantage of the disaster to further dominate the phone lines in southern Mississippi and Louisiana, costing customers valuable time and money.

Frank O'Toole, of Anacoco, La., is a former customer of Momentum Telecom Inc., which competes with Bellsouth to provide phone service. He said Bellsouth forced him to switch his local service in order to get phone service turned back on promptly.

"The only way I got phone service back again was by switching to Bellsouth. I just got tired of waiting. My wife had to go out and buy $600 worth of cell phones during all that time we were waiting, just so we could have phone servicer," said O'Toole, who says that next-door neighbors using Bellsouth had their phone service back on weeks ahead of him.

"My mother had hers, my brother had his. Everybody up on our hill had it. It was either Bellsouth or no phone."

Momentum Telecom Inc., formerly known as Momentum Business Solutions, says Bellsouth has been promising customers faster reconnect services if they transfer their accounts to Bellsouth. Momentum provided a list of customers in Mississippi, Louisiana and Alabama who they say had complained about Bellsouth, but only O'Toole returned calls by press time.

Momentum Telecom Inc. serves about 9,000 customers across Mississippi and Louisiana. The company leases the brunt of the network hardware, including phone lines, from BellSouth, meaning Momentum Telecom Inc. is dependent upon Bellsouth for repairs.

Other companies like MCI and AT&T also lease Bellsouth lines, but the difference between these bigger companies and Momentum is that the other companies own at least some hardware, such as amplifiers or converter boxes, and are able to restore service for their customers faster and with more independence than Momentum, a smaller company that is completely reliant upon BellSouth.

On Sept. 13 Bellsouth filed notice invoking an insurance clause that allows it to avoid penalties associated with maintenance and repair in areas affected by natural disaster. This exception, called a "force majeure" clause, would cover all the areas within Katrina's reach.

Momentum followed Sept. 23 with a complaint before the Mississippi Public Service Commission, and on Oct. 6 responded to Bellsouth's motion.

"When Bellsouth filed 'force majeure,' they basically wanted to say that 'all bets are off, we do not have to abide by regulations because we've got to get everybody's phone service back up and running,'" said Henry Walker, a Nashville attorney representing Momentum Telecom. "That's understandable, but what's happening is they're lighting up their own customers, but they're not turning on customers under different calling services. This is highly illegal."

Momentum Telecom provided the Jackson Free Press a recording of a three-way transaction between representatives of both Momentum and Bellsouth and a Momentum customer requesting phone line repair after hurricane damage. The Oct. 17 conversation, recorded by Momentum, reveals a Momentum representative informing the customer that Bellsouth (which is responsible for repairs to the lines) cannot repair those lines until November. The same Bellsouth representative then informs both the Momentum customer and representative that Bellsouth can have the customer's service working by midnight that day if the customer switches to Bellsouth.

The customer makes the switch.

"Midnight tonight? OK, I've got to go with it," the customer says, though assuring the Momentum representative that she has always been happy with Momentum's service.

In an Oct. 12 move to strike Momentum Telecom's Oct. 6 complaint, Bellsouth denies that it has "in any way discriminated against Momentum's end-user customers," and argues that Momentum has failed to provide any evidence that any investigative party could scrutinize, other than "vague, unsubstantiated sound bites with no facts to support them."

Mike Walker, director of internal affairs at Bellsouth, said the company could not offer in-depth arguments regarding rulings or litigation pending before a court or the Mississippi Public Service Commission. "The only thing I can say is that all the allegations in (Momentum Telecom's) petition are false and inaccurate," Walker said.

O'Toole says he and his wife are both willing to take their accusations to the Mississippi Public Service Commission, however.

"It cost us a lot of money to switch our home and our business to Bellsouth, and we're not happy about it. Not now, after all that we've been through with the storm," said O'Toole. "It's almost like Wal-Mart here. Wal-Mart ran so many small businesses out that now I'm forced to do business with them."

Southern District Public Service Commissioner Michael Callahan could not comment on the complaint, but said Bellsouth has an obligation to restore the phone service of every customer. "I hope all that's not going on. If it is, the Federal Communications Commission will take a very dim view of that, and this will cost Bellsouth a whole lot more money (in fines and penalties) in the long run than it would actually make them for switching a residential customer over," Callahan said.

Correction Appended: Above in the second paragraph, the original version says that Bellsouth forced the customer to switch "long-distance service." It should have said "local phone service." The correction has been made in the above version.


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