PacBell, MCI in Pay Phone Battle
In yet another instance of telecommunications industry infighting, WorldCom Inc. and SBC Communications Inc. are squabbling over who has the right to provide local phone service to California prison inmates.
SBC’s Pacific Bell, in a Bankruptcy Court filing Thursday, charged that WorldCom’s MCI unit illegally disconnected Pacific Bell pay phones in several California juvenile facilities and then hooked its own local lines into the phones. WorldCom says MCI has the right to provide phone service and equipment under a February contract with the state of California.
The case is the latest salvo in a heated battle between WorldCom and SBC in particular, and between “Baby Bell” local phone companies and long-distance rivals in general.
MCI, the nation’s No. 2 long-distance carrier, now offers local phone service in 40 states, including California, where Pacific Bell is the dominant provider. Pacific Bell is seeking permission to offer long-distance in California and also is asking the state to let it charge MCI and others more to lease its phone lines.
“Nobody wants to figure out how to make money at the business they’ve got; instead, they want to go after the other’s business,” said Peter Sevcik, president of NetForecast, a telecom consulting firm.
MCI has had a contract for 10 years to provide local and long-distance service for 85% of the 3,000 phones in 49 California state prisons and juvenile facilities. Pacific Bell had a subcontract with MCI to provide the local service and the phones.
Verizon Communications Inc. provides service to the other 15%. In 2001, according to the California Department of General Services, the 3,000 phones generated $85 million in revenue.
In February, when MCI signed another contract with California, it decided to offer the local service itself and install its own phones. Pacific Bell claims it still has the right to provide phones and local service.
Pacific Bell spokesman John Britton said MCI began illegally connecting its own local lines to Pacific Bell’s phones until Pacific Bell ordered it to stop.
MCI spokeswoman Natasha Haubold declined to comment. The issue is to be heard by the Bankruptcy Court on Tuesday.
