AGIS sues WorldCom over Net service
By Dan Goodin
Staff Writer, CNET NEWS.COM
May 14, 1998, 6:30 p.m. PT
In another volley aimed at WorldCom, Internet backbone provider AGIS has filed an
antitrust suit charging the telecommunications firm with providing shoddy service in
order to eliminate competition.
The suit, filed in U.S. District Court in southern Michigan,
seeks a preliminary injunction requiring WorldCom to honor a
contract it signed with AGIS, which is the fourth largest
carrier of Internet traffic. It comes amid a series of other
challenges to WorldCom, including a suit GTE filed last week
attempting to block WorldCom's proposed $38 billion merger
with MCI Communications.
"WorldCom has intentionally canceled, delayed, and otherwise interfered with the
[services it promised AGIS], specifically with the contract between AGIS and AGIS's
customer," the court filing alleges. Damages "have cost and will continue to cost AGIS
loss of revenue, pecuniary losses, compensatory losses, loss of goodwill, and further
damages in excess of $50 million." Although AGIS in January invested $260 million in
infrastructure from Qwest Communications, it still relies on WorldCom to provide
services to some of its customers.
WorldCom also has come under fire from the Justice Department, the European
Commission, and consumer advocate Ralph Nader's Consumer Project on
Technology. They allege that if Jackson, Mississippi-based WorldCom, which is the
No. 1 carrier of Internet traffic, is allowed to merge with MCI, the No. 3 Internet
carrier, the merged company will move some 70 percent of all Net traffic.
"We think there's very serious concern about potential dominance of the Internet
backbone market," Sprint vice president of law David Eisenberg said in March about
the proposed merger.
Representatives from WorldCom were not immediately available for comment.
Jason Delker, a spokesman for AGIS, said the suit did not directly take aim at the
merger but that as WorldCom's competition has shrunk, it has deliberately provided
less reliable service to AGIS. "WorldCom is trying to prevent us from being a
competitor by offering poor performance," he added. |
