AT&T sues MCI, alleging racketeering
The phone giant accuses MCI of continuing to secretly route phone calls through Canada even though it is under investigation for doing so by state and federal regulators.
By law, phone companies are supposed to charge rivals the lowest possible prices to use their networks to complete calls. But in what AT&T dubs the "Canada Gateway Project,? MCI is routing calls through cheaper networks up north but charging AT&T the full rate, according to the suit, which was filed in a Virginia federal court.
The lawsuit alleges that MCI engaged in "substantive racketeering through a pattern of multiple acts of mail fraud and wire fraud," according to an AT&T statement.
"AT&T maintains the scheme is ongoing and that MCI and Onvoy continue to engage in the misconduct," the statement said.
Onvoy, a Minneapolis, Minn.-based wholesale dealer of broadband and telephone services, is also named in the lawsuit as a partner with MCI in the alleged scheme. ?We anticipated something like this would surface, so we weren?t surprised,? said an Onvoy spokeswoman. She had no additional comment.
MCI has said it is cooperating with several ongoing investigations and has denied similar allegations in the past. An MCI representative was not immediately available for comment Tuesday.
MCI has been fighting its way out of bankruptcy court since July 2002, when it was known as WorldCom and was mired in an $11 billion accounting scandal, considered among the biggest in history. It has since replaced much of its top-level management. But last week, the state of Oklahoma charged that the company and six former executives had violated state securities laws by giving false information to investors between Oct. 1, 2000, and March 31, 2002.