Minn. Files Vs. U S West DSL Service

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U S West is under fire in Minnesota for alleged
anti-competitive tactics related to the marketing and deployment of its new MegaBit
Internet-access service.

In a complaint filed with the Minnesota Public Utilities
Commission, Attorney General Hubert H. Humphrey III and the Department of Public Service
accused the telco of favoring its U S West.Net affiliate over other Internet-service
providers.

"High-speed Internet access will be an extremely
popular service to many small business and consumers," Humphrey said in a prepared
statement. "But U S West cannot be allowed to use its market advantage as a regulated
monopoly to squeeze out its competition by discriminating in favor of its own
affiliate."

The complaint alleged that U S West has furnished U S
West.Net with the high-speed phone connections and equipment to offer MegaBit service,
while delaying installations requested by other ISPs.

Presumably, U S West knew how many ISP requests it had for
DS1 and DS3 lines, but it "chose [instead] not to keep the necessary lines in
inventory to serve its ISP customers," according to the complaint.

"A number of ISPs were put on hold, while U S West.Net
got the equipment first," said Nelson Updaw, telecommunications manager at the DPS.
"We investigated the timing of some of these decisions and concluded that U S West
was giving preferential treatment to its own Internet-service provider."

Meanwhile, U S West was promoting its service by offering a
free digital modem, installation and reduced-rate setup and training at a time when the
only ISP scheduled to receive its "MegaCentral" equipment was U S West.Net, the
complaint alleged.

As a result, consumers could only sign up with U S
West.Net, because "U S West would not permit a 'MegaSubscriber' customer to
obtain the benefits of the promotion if the customer's ISP's MegaCentral was
pending," according to the grievance.

U S West officials, meanwhile, said the company was
reviewing the complaint last week, but they noted that at least 14 Minnesota-based ISPs
were already capable of offering MegaBit service to their customers.

"We know that there are issues," U S West
spokeswoman Mary Hisling said, "but we're disappointed with this complaint. It
moves the matter into a more formal setting that will make it more difficult to
resolve."

Introduced April 13, the MegaBit service -- marketed by U S
West under the name MegaSubscriber -- is based on new asymmetrical-digital-subscriber-line
technology, which allows consumers to simultaneously surf the Internet while talking on
the same line.

A second service, MegaCentral, is sold to other ISPs, which
aggregate Internet traffic at a central office for their own customers.

The complaint also accused the company of
"slamming" consumers who called inquiring about ADSL service, but who indicated
that they wanted to keep their existing ISP.

"They ended up getting a bill from U S West,"
Updaw said.

Updaw added that U S West has also refused to allow resale
of its service.

Under Minnesota law, the PUC has the authority to order U S
West to ensure that ISPs receive the same treatment as U S West.Net, and to permit sale of
its MegaBit service, Updaw said.

As of last week, the PUC had not scheduled hearings on the
filing.

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