A New Flap Over Web Phone Books
In a sign that competition among online telephone listing services is heating up, Switchboard Inc. has sent a letter to a member of Congress and the Justice Department complaining that regional telephone companies are trying to monopolize the nascent business.
The letter, sent to Rep. Edward J. Markey (D-Mass.), accuses five regional phone companies of combining forces “in an anti-competitive manner” and of potential violations of federal telecommunications and antitrust regulations.
The accusations center on a nationwide business directory Web page set up jointly by Ameritech, BellSouth, Nynex, Pacific Bell and US West. The five companies also have an exclusive deal with Netscape Communications, giving their yellow page listings prime exposure on the software company’s popular Web site.
“Five players out of maybe 12 in this whole business have all the money and are buying everything jointly,” said Douglas McIntyre, president of Switchboard, who signed the letter. “It takes the competitive element out of this.”
The complaint marks the first challenge to the regional phone companies as they move their profitable listings businesses online, and it also highlights the struggles online start-ups face in fending off giants from the analog world. Amazon.com, for instance, is locked in a battle for supremacy in Internet book sales with bookstore giant Barnes & Noble.
Analysts said the legal merits of Switchboard’s complaint are uncertain but that the regional phone companies pose a serious threat.
“These companies are well-known, have brand identity and, arguably, the highest-visibility spot on the Internet,” said Ira Machefsky, an analyst at Giga Information Group in Santa Clara, Calif.
Switchboard, based in Westboro, Mass., nevertheless remains one of the early leaders in the online directory market, and its white pages listings are featured on the America Online network.
McIntyre said Switchboard’s primary complaint is not that the regional Bell companies have entered the online market but that they are acting as a group.
A spokesman for Ameritech, a regional phone company based in Chicago, said the companies aren’t violating any federal regulations.
“This co-marketing agreement is a way for Ameritech to extend its regional focus,” said Geoff Potter. “Alliances are a way of life on the Internet.”
A spokesman for Markey said the congressman--the top-ranking Democrat on the House Telecommunications Subcommittee--had received the letter and that it had been forwarded to the office’s telecommunications expert.
Justice Department officials were not available for comment.
