dhk@teletech.uucp (Don H Kemp) (11/14/89)
[Moderator's Note: Mr. Kemp passed these along. The first describes
the lawsuit, which we covered here in the Digest recently. The second
press release from AT&T announces the settlement of the lawsuit. PT]
FOR RELEASE NOV. 8, 1989
DALLAS -- AT&T today filed a lawsuit charging that a
Texas-based corporation equips its pay telephones to
illegally obtain billing information owned by AT&T.
The lawsuit asks for $2 million in punitive damages and
an undetermined amount in actual damages from Intellicall
Inc., headquartered in Carrollton, Texas. It also asks the
U.S. District Court in Dallas to order Intellicall to stop
its unauthorized use of AT&T billing information.
At issue is how Intellicall pay phones determine the
validity of calling card numbers for billing purposes. AT&T
contends that Intellicall pay phones are designed and
programmed by Intellicall to reach into and obtain the
information directly from AT&T's card validation system.
That system, called Billing Validation Application (BVA),
is a part of AT&T's network facilities. Before AT&T
completes a call that will be charged to an AT&T Card, its
validation system verifies that the number provided by the
customer is currently valid.
Based on contractual arrangements made before the 1984
breakup of the Bell System, regional Bell telephone companies
also use the validation system. AT&T does not permit
competitors such as Intellicall to use the system because the
system was built by AT&T and contains valuable competitive
information.
AT&T alleges that when callers use an AT&T Card or Bell
company calling card at an Intellicall pay phone, the pay
phone automatically places a separate call through AT&T
or local Bell facilities to a pre-programmed telephone number
so that AT&T's validation system will automatically check the
card number.
If the card number is valid, the Intellicall pay phone
then puts through the original customer call.
"As a result of these practices," the lawsuit says,
"Intellicall surreptitiously and without authorization
obtains validation data from AT&T, obtains fraud control for
calls by its customers without having to invest in fraud
control facilities or otherwise purchase fraud control
services, imposes costs on AT&T, and ... obtains an unfair
advantage over its competitors providing pay telephone and/or
long-distance service, including AT&T."
Although AT&T does not authorize other companies to
accept the AT&T Card and does not permit competitors to use
its validation system, the lawsuit notes that Intellicall
could purchase validation services for Bell company calling
cards from other companies.
AT&T said it notified Intellicall that it was violating
AT&T's proprietary rights and gave Intellicall every
reasonable opportunity to halt the fraudulent validation
practice. Only after Intellicall persisted in its unfair
practices did AT&T decide to take legal action.
# # #
FOR IMMEDIATE RELEASE
DALLAS -- AT&T and Intellicall, Inc. today announced the
settlement of a lawsuit filed last week by AT&T against
Intellicall, seeking damages and an injunction. AT&T had accused
Intellicall of unauthorized access to AT&T's calling card
validation system.
The settlement also covered potential counterclaims which
Intellicall intended to file against AT&T.
In the agreement, Intellicall acknowledged AT&T's proprietary
rights in the Billing Validation Application system, and agreed to
make modifications in its licensed pay telephone software to
safeguard against unauthorized access and use of the AT&T system.
The terms of the agreement include an undisclosed payment by
Intellicall to AT&T to contribute to the establishment of a
compliance program which will permit AT&T to monitor unauthorized
access to its billing systems.
"AT&T is pleased that a settlement recognizing AT&T's
proprietary right to the validation system was reached so
quickly," said Gerald Hines, director of AT&T Card Services. "It
Don H Kemp "Always listen to experts. They'll
B B & K Associates, Inc. tell you what can't be done, and
Rutland, VT why. Then do it."
uunet!uvm-gen!teletech!dhk Lazarus Long