Kentucky Commissioners Spank BellSouth

Regional ISP challenges BellSouth's scheme to market its own brand of DSL access for less then it sells the service to rivals. PSC rules incumbents can't stifle competition by hiding behind tariffs anymore.

by Carol King of internetnnews.com [December 6, 2000]

The Kentucky Public Service Commission ruled that BellSouth Telecommunications Inc. is guilty of violating Kentucky law concerning advanced services deployment.

Local ISP wins
The ruling is the result of action taken last year on behalf of a Louisville-based regional Internet service provider. IgLou Internet services, Inc. filed a formal complaint with Kentucky PSC in 1999 charging that BellSouth had abused marketing standards and knowingly practiced a method of DSL deployment designed to stifle competition.

Dannie Gregorie, IgLou co-founder, said BellSouth used its position to the benefit of its own Internet operations over all other ISPs.

"This, coupled with a tariff that works to lock out other providers, has provided BellSouth with an unfair and illegal advantage in deploying DSL and other Internet services," Gregorie said.

The Kentucky PSC determined that BellSouth discriminated against rival ISPs by giving its own brand of Internet services preferential treatment.

BellSouth biased
According to the ruling, the "issues raised by the complaint transcend the private dispute between the parties to this case. They are major ones for this Commonwealth, implicating concerns involving the growth of competition in our telecommunications market as well as ease of access to information technology that is crucial in determining Kentucky's future."

IgLou alleged that BellSouth's DSL offering was discriminatory because the discount it offered was out of reach from small ISPs. But Michael Seebert, BellSouth regional director for Louisville, said there were no findings that accounting safeguards were being violated.

"This is a region-wide service in which pricing, tariffs and rates are approved by the FCC," Seebert said. "We are constantly looking at pricing structures," he added. "BellSouth has a history of treating customers fairly and we plan to continue to do that."

Blue bell
BellSouth has been given 30 days to alter its business practices. Seebert also noted that the ruling is presently under review.

IgLou Attorney Jonathon Amlung said the win is significant for all ISPs because it establishes an important legal precedent for open access to DSL broadband services.

"We believe this decision is the first of its kind against a Bell company," Amlung said.

Happy hour
Dean Brooks, IgLou co-founder said the Kentucky PSC ruling is monumental.

"The decision restores a level playing field for IgLou and other ISPs in the Commonwealth of Kentucky," Brooks said. "The ultimate success of broadband will depend heavily upon a wide level of consumer choice for access."

Part of BellSouth's penance for its illegal marketing activity includes making sure Kentuckians know they have a choice of DSL providers. BellSouth's Seebert said that a script has been set up so when customers call BellSouth about DSL services they are informed that other Internet services also provide DSL access in the region.

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