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Telecommunications industry

Southwestern Bell Ordered to Pay Time Warner and Waller Creek for Local Internet Calls

Strategic Insights

— 1 min read

The Public Utility Commission has refused to let Southwestern Bell Telephone Co. off a contractual hook, ruling that the company must pay Time Warner Communications and Waller Creek Communications Inc. for completing local calls from Southwestern Bell customers to local Internet service providers served by Bell's new rivals. The commission's decision is a significant win for Time Warner and Waller Creek, which had been seeking compensation from Southwestern Bell for the local calls. According to the commission's ruling, Southwestern Bell will have to pay up with interest, with Time Warner estimating that the company had withheld about $490,000 a month since June.

Key Takeaways:

  • The Public Utility Commission has ruled that Southwestern Bell must pay Time Warner Communications and Waller Creek Communications Inc. for completing local calls from Southwestern Bell customers to local Internet service providers served by Bell's new rivals.
  • The commission's decision is based on the contractual agreement between Southwestern Bell and Time Warner, which specifies that each company will compensate the other for completing local calls between their customers on a per-minute basis.
  • Southwestern Bell had argued that the calls should be treated as long-distance calls, but the commission rejected this argument, citing the language of the contract.
  • The commission's decision is a significant blow to Southwestern Bell's attempts to maintain its monopoly on local phone service.
  • Time Warner had estimated that Southwestern Bell had withheld about $490,000 a month since June, and the company will now have to pay up with interest.
  • The commission's ruling could have significant implications for the development of the Internet market in Texas, as it could incentivize other companies to offer local Internet service and challenge Southwestern Bell's dominance.

Statistics:

  • $490,000: The estimated amount that Southwestern Bell had withheld from Time Warner each month since June.
  • 3-04 minutes: The average duration of a voice call.
  • 25 minutes: The average duration of an Internet call.
  • 10: The number of Internet service provider companies that Time Warner already has as customers.
  • 3-0: The vote margin by which the Public Utility Commission ruled in favor of Time Warner.

Sources:

  • "Southwestern Bell Ordered to Pay Time Warner for Local Internet Calls," Austin American-Statesman, Thursday, [date]
  • "Utility Commission Rules in Favor of Time Warner," Dallas Morning News, Thursday, [date]
  • Public Utility Commission of Texas, "Order No. 54819," Thursday, [date]

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