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BellSouth has failed to win a federal restraining order against a Macon, Ga.-based telecommunications competitor. On Tuesday, that competitor, Access Integrated Networks Inc., filed a counterclaim against BellSouth, accusing it of anticompetitive conduct. U.S. District Judge Willis B. Hunt Jr. of the Northern District of Georgia refused to issue a temporary restraining order on behalf of BellSouth Telecommunications Inc. and a sister company, BellSouth Intellectual Property Corp., against Macon-based AIN. Such an order would have temporarily barred AIN from selling telephone services to small-business customers in nine Southeastern states, in effect suspending the company’s operations. AIN leases wholesale access to BellSouth’s telephone lines and other equipment from the BellSouth regional companies and then sells those services, in competition with BellSouth, to retail customers. The leases are a requirement of the Telecommunications Act of 1996. BellSouth sought the temporary restraining order last month, claiming that AIN marketers were “disparaging BST [BellSouth Telecommunications] in an effort to solicit business from BST’s customers,” according to the suit. BellSouth also claimed that AIN marketers told customers that AIN was an affiliate of BellSouth, the suit claimed. BellSouth Intellectual Property v. Access Integrated Networks, No. 1:02-cv-2165 (N.D. Ga. Aug. 5, 2002). As a result, BellSouth claimed, it had lost customers to AIN. Among the allegations contained in BellSouth’s complaint are charges of false advertising, unfair competition, deceptive trade practices, misrepresentation and fraud. In his Aug. 15 order, Hunt notes that after receiving complaints from BellSouth, AIN “carefully investigated the source of the problem and took all possible action to address it.” The actions included suspending all of AIN’s telemarketing operations via two companies it had hired to market its services, and several in-house warnings and memoranda to AIN staff forbidding the use of BellSouth trademarks for any purpose during door-to-door sales campaigns. As a result, Hunt writes, “the Court is currently convinced that all allegedly unlawful behavior has either already ceased or has been addressed directly by AIN and will cease in the near future. … Most significantly, the Court takes seriously representations made by AIN that it intends both for purposes of following the law and for purposes of maximizing its business plan, to make every effort to cease all unlawful acts in the future.” Paul Quiros, a partner at King & Spalding, is defending AIN with newly elected partner Barry Goheen. Quiros said that BellSouth sued AIN because the company is losing business to competition and will “do anything” it can to protect its current customer base. “That includes bringing lawsuits,” he said. The counterclaim accuses BellSouth marketers of unfair marketing tactics allegedly outlined in a BellSouth internal memo. “For instance, last year BellSouth was calling our clients and telling them we were in financial difficulty and going out of business,” Quiros said. “Access is doing fine financially. In fact, it’s doing great. But when you tell a person their telephone service might be cut off because the company might be going out of business, consider how damaging that is.” In an April letter, BellSouth’s president blamed the problem on an outside telemarketer he claimed had been fired and apologized to AIN. Neither a BellSouth spokesperson nor BellSouth counsel Matthew H. Patton could be reached comment.

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