Telephone Industry Suits

A $600,000 fine levied against a San Jose firm accused of failing to prevent children from hearing obscene phone messages was reconfirmed by the Federal Communications Commission in Washington. The commission ordered Intercambio to pay up within a month or face criminal prosecution. Since its initial finding in July, 1988, the FCC said that Intercambio had offered nothing new to support the government's contention that the company had violated federal regulations.

Working out of a Lawndale garage with $4,000 in start-up money, Fuad Radi entered the fledgling cellular phone industry in 1984 and soon created a $35-million wholesale cell phone company. The firm's fall was even faster than its rise. By 1995 Radi was out of business--a victim, he says, of the duel between cell phone carriers Los Angeles Cellular Telephone and AirTouch Communications, which were giving customers deep discounts on equipment in a battle for competitive edge.

California and five other states sued WorldCom Inc. on Thursday, accusing the nation's second-largest long-distance phone company of tricking thousands of customers with deceptive advertising and other fraudulent tactics to capture new business and boost sales. The complaints are part of a nationwide crackdown against telephone fraud, with other states filing lawsuits Thursday against long-distance market leader AT&T Corp. and No. 3 Sprint Inc.

National Telephone & Communications Inc. has agreed to pay more than 10,000 customers in California up to $310,000 to settle charges that it changed consumers' long-distance phone service without their permission--a practice known as slamming. The California Public Utilities Commission had been investigating complaints of slamming and forged signatures on phone service switching paperwork.

Working out of a Lawndale garage with $4,000 in start-up money, Fuad Radi entered the fledgling cellular phone industry in 1984 and soon created a $35-million wholesale cell phone company. The firm's fall was even faster than its rise. By 1995, Radi was out of business--a victim, he says, of the duel between cell phone carriers Los Angeles Cellular Telephone and AirTouch Communications, which were giving customers deep discounts on equipment in a battle for competitive edge.

National Telephone & Communications Inc. has reached a tentative agreement with state regulators to pay $370,000 to settle claims that it switched the long-distance service of at least 10,000 consumers without their permission. The pending settlement, which still must be approved by the state Public Utilities Commission, ends a nine-month investigation by the commission's staff into consumer complaints against the Irvine telecommunications company.

It used to be that consumer complaint issues involving phones and phone services were handled almost exclusively by state and federal regulators, who were charged with keeping phone companies in line and in business. But things are murky now. In this era of partially deregulated communications, only some phone services get continual regulatory scrutiny, while others--most notably "deregulated" high-speed Internet services from phone companies--do not.