Con game

Consumers allege DSL speeds are SBC scam Time will tell if Thomas McLaughlin is a groundbreaking class-action plaintiff or just another disgruntled customer.

The Houston man and four other customers filed a lawsuit last month against SBC Communications, alleging that the company guaranteed them DSL service with a download speed of 384 kb/s but in fact delivered only 128 kb/s for newsgroups and e-mail. The petition, filed in Nueces County, Texas, seeks class-action status for a group that could include many of the 435,000 DSL customers of SBC and its affiliates in 13 states.

McLaughlin and his coplaintiffs charge that SBC fraudulently induced them to subscribe to its DSL service by misrepresenting the minimum connection speed they would receive. Their failure to receive faster Internet access for all services was a breach of contract and resulted in unspecified financial losses, including installation, modem and monthly charges, as well as lost time and business, the petition says (Telephony, Aug. 21, page 14).

"It's an old business practice applied to a new technology," said Geoffrey Berg, the plaintiffs' attorney and a partner in Berg & Androphy in Houston. "There may not be DSL precedents, but there are plenty of class-action suits where a defendant has been shown to be liable for deceptive trade practices."

McLaughlin's case may be the tip of an iceberg of DSL customer discontent. Since the McLaughlin suit was filed Aug. 16, "I've gotten calls and e-mails from people who have asked me to look into possible deceptive practices by other DSL providers," Berg said. He said he is contacted at least once a day.

SBC says that it is meeting its obligations to DSL customers. Its DSL service caps the speed for newsgroup access to 128 kb/s "to provide a more reliable service for all our customers using the newsgroups," the company said in a statement.

DSL service has earned its fair share of customer service complaints, most of them related to availability and installation, as the high-speed Internet access service rolls out rapidly nationwide. But actual lawsuits against DSL providers are rare, and industry analysts haven't heard of a case like this one.

Whether McLaughlin will prevail in court - or, more likely, settle out of court - remains to be seen. One thing is for sure: He is spitting mad at SBC.

"Only 49% of it is me being upset by the download speeds," he said, "but the worst part is [SBC's] attitude."

McLaughlin's problems began in May, about six months after he subscribed to DSL service from SBC affiliate Southwestern Bell; McLaughlin also uses the local telco as his ISP. Initially, he said,"everything was wonderful."

But "when I went from 1500 K to 128 K, that was pretty obvious. Things that used to take seconds to download took several minutes."

The slower newsgroup downloads hurt his computer technical support business, Net Help Solutions, McLaughlin said. McLaughlin relies heavily on tech-support newsgroups to solve problems for his small and medium-sized business clients. Web access was not affected.

McLaughlin said he could switch to another DSL provider in Houston, but SBC makes the process difficult. He would have to pay a $200 penalty and wait three weeks for SBC to connect phone lines to another DSL company - time he can't afford to be without Internet access, he said.

"They make it practically impossible for you to get out in a practical way," Berg said. SBC, as a local exchange carrier, controls the lines leased to other DSL providers. "It could be a monopolistic trade practice and evidence of their intent to dominate the [DSL] market," he added.

Southwestern Bell provides DSL service for $39.95 to $59.95 per month through 22 "ISP partners," according to its Web site. The lawsuit's potential class includes only customers that used SBC's affiliates - Ameritech, Nevada Bell, Pacific Bell, Southern New England Telecom and Southwestern Bell - as both a DSL provider and an ISP, McLaughlin said.

The alleged gap between the promises SBC advertised and the reality it delivered reflects growing competition in broadband services and DSL in particular, Berg said. To get and hold customers, providers are resorting to cutthroat and possibly illegal means, he added.

That markets can result in lawsuits as new technologies gain footing, said Susan Grant of the National Consumers League in Wash-ington."I do think it's a ripe area for potential problems because as companies rush... to build market share in this lucrative new area, it wouldn't be surprising to find misleading advertising claims," she said. "Intentional or not, inaccurate claims arise and are a problem for consumers."

Although SBC and other major DSL providers advertise downstream connection speeds of 144 kb/s to 1.5 Mb/s on their Web sites, many also offer disclaimers such as SBC's: "Actual data transfer or throughput may be lower than [the minimum connection speed] due to Internet congestion, server speeds, protocol overheads and other factors that cannot be controlled by SBC."

SBC and analysts point out that DSL providers can only guarantee connection speeds between a customer's computer and a carrier's central office, where the DSL access multiplexer that allows high-speed Internet access is installed. Beyond that, the rate at which customers can access Web sites, newsgroups, e-mail and other Internet content varies, depending on such factors as the speed of the ISP's routers and servers and the cleanliness of copper wires.

"The technical smell test... is that this is not a DSL issue, but an ISP issue," said Lawrence K. Vanston, president of Technology Futures in Austin. He is not familiar with the details of McLaughlin's case.

SBC concedes that it lowered the speed for accessing newsgroups, which are used by 1% of its DSL subscribers, but it denies that it did so to gain bandwidth for other customers."It does help to balance the load on the Internet news servers operated by SBC's Internet access companies," the company said in a statement.

According to analysts, DSL services cannot always deliver their full promised connection speeds, in part because DSL is a shared-access service with limited bandwidth. In SBC's case,"their customer base in certain markets is beginning to outstrip their installed network," said analyst Carl Garland of Current Analysis. In Houston, that situation apparently led SBC to slow down the rarely used newsgroups to keep popular Web access up to speed, he said.

"They were screwing a community [of newsgroup users] who was able to know they were being screwed," Garland added. The danger for SBC is that poor service could result in customers lost to a growing number of competitors, he said.

Whatever providers' claims, the onus is on DSL subscribers to make sure that they know what they're buying, said Tom Nolle, president of CIMI Corp., a Voorhees, N.J., consulting firm.

"There's a certain amount of `caveat emptor' here," he said. "An Internet user has an unparalleled amount of good information. There's a certain buyer responsibility to use resources to get good pricing."