Verizon files suit to collect past-due fees

Verizon Communications today filed suit in U.S. District Court in Delaware to collect about $37 million in past-due fees for wholesale services it provided to ATX Communication.

The services, which included access to Verizon’s network as well as the sale of the carrier’s lines to ATX – which then re-branded and re-sold the lines to its customers – were provided to ATX in Pennsylvania, New York, Delaware, New Jersey, Virginia, Maryland and the District of Columbia.

“ATX billed its own customers for services provided to them,” said John Frantz, a Verizon vice president and counselor to the carrier’s general counsel, in a statement. “Likewise, ATX has an obligation to pay the wholesale provider that supplied the service in the first place.”

Frantz added that Verizon would “vigorously enforce” its rights whenever wholesale customers systematically disregard their legal obligations.

ATX countered today by accusing Verizon of improperly billing for services pursuant to the interconnection agreement between the carriers. ATX is asking for “millions of dollars” in credits. Verizon has been improperly billing ATX “from the very first invoice in 1998,” Thomas Gravina, ATX president and CEO, said in a statement.

“Instead of correcting its billing and back office support system failures to eliminate its performance problems, we believe Verizon has opted to simply ignore them,” Gravina said.

Bruce Bennett, ATX vice president of external affairs, said in an interview today that Verizon has been billing his company at rates that are not included in the interconnection agreement and that customers that have been converted from resale to the unbundled network element platform have been put out of service.

“They refuse to acknowledge our validly initiated disputes,” he said. “Consequently, we threatened litigation and after we did that, they took a retaliatory action.”

However, Verizon accused ATX of seeking to “divert attention from its delinquency in making payments on its massive debts” by threatening to sue Verizon for breach of federal antitrust statutes. It was that threat that prompted Verizon’s suit.

In its complaint, Verizon said ATX was guilty of “embracing the adage that the best defense is a good offense.”

Bennett found the accusation “laughable.”

“Clearly it is Verizon that has decided to take a retaliatory action,” he said.

If an antitrust lawsuit is central to ATX’s strategy, as Verizon contends, it may be an uphill battle. Earlier this week, a U.S. District Court in New Jersey dismissed defunct CLEC Ntegrity’s antitrust claim against the RBOC.

Ntegrity brought the antitrust claim after Verizon sued it to collect $4 million in past-due fees for services provided in New Jersey and five other states. In addition to dismissing the claim, Judge Garrett E. Brown, Jr., also denied Ntegrity’s motion to dismiss the Verizon suit.

“The antitrust laws were designed to promote free competition and enhance consumer access to services, not to be an end-run around legislation imposing very specific duties,” Brown said in the decision.

Reporter’s Notebook

The Illinois Commerce Commission yesterday ordered SBC Ameritech to issue credits totaling $197 million to customers. The figure represents the share of savings that resulted from the merger of the two carriers. The credit is estimated to amount to about $43 and will be applied on a per line basis to current customers.