Verizon Seeks to Collect $37 Million in Past Due Bills from ATX Communications

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WASHINGTON -- Verizon has filed suit in U.S. District Court in Delaware to collect past-due bills amounting to roughly $37 million for wholesale services it provided to ATX Communications.

"ATX billed its own customers for services it provided to them. Likewise, ATX has an obligation to pay the wholesale provider that supplied the service in the first place," said John Frantz, Verizon vice president and counselor to the general counsel. "It's our right under federal and state law, and our duty to our shareholders and millions of other retail and wholesale customers, to ensure timely payment for services we provide."

ATX describes itself as "a leading super-regional carrier and integrated access provider of broadband connectivity to the commercial segment, delivering tailored solutions to businesses nationwide." The company provides telecom services to its customers using wholesale services provided by Verizon.

The suit, filed Aug. 12, seeks payment for services Verizon provided to ATX in Pennsylvania, New York, Delaware, New Jersey, Virginia, Maryland and the District of Columbia. The services included access to Verizon's network and the sale of Verizon phone lines that ATX re-branded and resold to its own customers.

According to the complaint, ATX defaulted on approximately $37 million in charges for services provided by Verizon, including approximately $26 million in undisputed charges. The case arises out of the "ATX business strategy of repeatedly seeking to get something for nothing."

The complaint states that "Embracing the old adage that the best defense is a good offense, ATX has sought to divert attention from its delinquency in making payments on its massive debts by threatening to sue Verizon for breach of federal antitrust statutes. ATX has shown its willingness to make good on such promises, and Verizon accordingly seeks a declaratory judgment ... that it has not violated any federal antitrust statute in its dealings with ATX."

"We will vigorously enforce our rights whenever wholesale customers systematically disregard their legal obligations," said Frantz.

Under the Telecommunications Act of 1996, local telephone service may be purchased at a discount from phone companies and re-marketed to consumers by rival companies like ATX.

Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 135.1 million access line equivalents and 30.3 million Verizon Wireless customers. Verizon is also the largest directory publisher in the world. With more than $67 billion in annual revenues and approximately 241,000 employees, Verizon's global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit
www.verizon.com.

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