FLORIDA COMPETITIVE FIGHT TURNS NASTY

About 300,000 Floridians are caught in the crossfire of a squabble between Supra Telecom and BellSouth, which wants the residential CLEC to cough up more than $100 million in unpaid bills. BellSouth claims that Supra, which last week filed for Chapter 11, has missed several payments, including an $18 million interconnection tab for August. What makes this case different from other billing spats, though, is BellSouth's tactics.

With permission from the Florida Public Service Commission (PSC), BellSouth began placing automated calls early last week, warning Supra customers that their service would be shut off in two weeks. Those calls were temporarily halted later in the week while Supra's bankruptcy motion was reviewed. BellSouth took issue, however, with inferences that the battle was more to do with Supra's status as its top competitor in Florida.

“This is not a competition issue. It's a billing collection issue,” a BellSouth spokesman said. “Since June 2001, they have paid less than 5% of their bills. As of July 15, we were under a new contract that has more teeth. They signed that contract, they knew what their obligations were and that was upheld in a federal court.”

Supra claims it doesn't owe BellSouth $18 million or $100 million and that it is not going out of business. In fact, to publicize its case the company is running ads in Florida newspapers claiming that BellSouth over-billed them “by up to 400%.”

An open letter to Florida residents signed by Supra Chairman and CEO Kay Ramos condemned BellSouth's “rogue actions,” saying the ILEC never provided Supra with an accurate bill. “We refuse to pay an inaccurate bill designed to strain our resources and engage us in costly court actions,” he wrote in the letter.

While Florida has about 160 competitive providers, most deliver commercial — not residential — service. Supra is by far the state's largest residential provider.

The PSC, which has been sublimated somewhat by the bankruptcy action, was scheduled to rule Nov. 5 on BellSouth's full petition to establish an emergency transition plan, which would allow a continued interim service period for Supra customers. A PSC spokesman said the commission is working toward a resolution and that a loss of service is the least palatable scenario available.

However, BellSouth's 14-day transition plan is akin to allowing the RBOC to cherry-pick Supra's customers, said Matt Blocha, president and chief operating officer of Florida Digital Network, a facilities-based competitive provider that would like a shot at Supra's fleeing masses.

“Fourteen days is not going to be enough for all of the customers by any means,” Blocha said. “There are going to be a lot of customers that end up being on the Bell network.”

Meanwhile, the PSC keeps a wary watch.

“There's no precedent for this in this state,” the PSC spokesman said. The closest thing was Adelphia Business Solutions' bankruptcy and that was solved when another incumbent stepped in and picked up the customers, he added.

Supra's Chapter 11 filing has added to the complexity by moving the fight into bankruptcy court, where at least one industry source gave Supra a fighting chance.

“Supra has a way to walk through fire,” said a person close to the matter. “Right when you think they're down, they come up with a legal twist.”