STS Telecom Seeks over $100 Million in Damages from AT&T in FCC Complaint

2009-07-25 00:30:04 -

In a classic “David and Goliath” confrontation, a complaint filed earlier this week with the Federal Communications Commission (FCC) by Florida-based STS Telecom against AT&T follows four years of broken promises, lies, and “bait and switch” tactics by reconstituted telecommunications giant AT&T, according to Keith Kramer, STS executive vice president of legal and regulatory affairs. He indicated the complaint is

to be evaluated by the FCC under an expedited review process.

STS Telecom alleges in the complaint that AT&T failed to comply with Congress’s much embattled Telecommunications Act of 1996 in refusing to provide STS fair and reasonable access to various telecommunication services. As a result, AT&T severely restricted STS' access to Florida’s profitable residential and small business markets. Kramer said that AT&T used “strong arm” tactics to force it into buying services that were unnecessarily expensive, while refusing to sell STS other essential network services as promised, and as mandated by Congress.

According to Kramer, AT&T’s anticompetitive actions have accumulated over the past four years, resulting in substantial business losses and deterioration of its previously robust residential and small business market share.

“We designed our network in accordance with the rules established by the FCC’s Triennial Review Order of 2003. STS deployed an extremely cost-effective network design that could be easily replicated in any market without a large capital expenditure,” said Kramer. “Any telephone company similar to STS could prosper with a comparable network,” Kramer added.

Kramer noted that the Telecommunications Act of 1996 was Congress’s mandate to further liberate telecommunications markets by breaking the stranglehold on local phone services held by the Regional Bell Operating Companies (RBOCs). He said that during the prior administration, however, the Department of Justice took a relatively “hands off” approach and allowed several of the Regional Bell Operating Companies to recombine the monopoly that the courts had previously split apart in the 1983 Divestiture of AT&T. He noted further that today’s AT&T is a combination of four original RBOCs (PacTel, Southwestern Bell, Ameritech and BellSouth) combined with the original long distance operations of AT&T, and that AT&T’s most recent merger with BellSouth, completed in 2007, re-established AT&T as one of the largest telephone companies in the world.

"We are at a point where the U.S. Justice Department will no longer accept anticompetitive actions and trade-restraining practices of market giants, previously tolerated by the prior administration,” said Mark Amarant, STS chief executive officer. According to Amarant, the 128-page complaint filed with the FCC contains ample evidence, with over 5,500 pages of supporting documentation, detailing AT&T’s alleged improper actions. Amarant said that there are multiple “smoking guns” provided to the FCC “that should not only prove AT&T’s wrongdoing but should also make it inevitable for both the FCC and the Justice Department to come to the same conclusion concerning AT&T's culpability in actively engaging in anticompetitive business practices.”

President Obama's top antitrust official recently said that the administration would aggressively crack down on antitrust violations, reversing a prior policy that had weakened the government's ability to take on monopolies. "As antitrust enforcers, we can no longer sit on the sidelines," said Assistant Attorney General Christine Varney, recently speaking at the Center for American Progress in Washington. As previously noted by Kramer, the prior administration brought historically few antitrust cases to trial. But Varney said those days are over. She promised a return to "tried and true” case law and Supreme Court precedent.

Copies of the complaint will be available tomorrow at www.ststelecom.com/pressroom.html : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. .

STS TelecomKeith Kramer, 954-252-1003 kkramer@ststelecom.com : mailto:kkramer@ststelecom.com orJordan
Richard Assoc. LLCMadeleine Franco, 801-463-0300 ir@jordanrichard.net : mailto:ir@jordanrichard.net