Judge Declares Transcom Legitimate ESP

Nearly three months after it declared Chapter 11 bankruptcy under pressure from the nations second-largest phone company, Transcom Enhanced Services, a wholesale VoIP network operator, has been vindicated by the courts.

Transcom calls itself an enhanced services provider (ESP), a definition SBC took issue with and fought to erase. As a wholesale VoIP network operator, Transcom works with LECs including AT&T, which apparently tried to piggyback on Transcom’s ESP exemption. That exemption allows Transcom to avoid paying access charges to carriers such as SBC.

“Our company strongly disagrees with the judge’s decision,” says SBC Spokesman Kevin Belgrade. “It’s inconsistent with the recent decisions by the FCC and … we’re considering all our legal options.”

Transcom is, as well, says CEO Scott Birdwell. He says the company — which can now come out of bankruptcy and resume normal operations — is assessing damage done by the challenge from SBC.

The FCC in early 2004 ruled that a specific service used by Transcom and claimed by AT&T did not qualify for an exemption given to ESPs. SBC then stepped in, maintaining Transcom — and AT&T — owed it back access charges. Transcom alleges SBC even contacted Transcoms customers, telling them Transcom was a bad industry player.

Under economic pressure from SBC, Transcom declared Chapter 11 bankruptcy in March 2005, but Judge Harlin D. Hale recently ruled in favor of Transcom regarding its status as an enhanced services provider. This allows the company to resume its service agreement with AT&T the company SBC, AT&Ts progenitor, expects to acquire.

“For months we have been held hostage by SBC’s intimidation, said Birdwell, in a prepared statement. They had been telling all Transcom customers and suppliers that we did not qualify for the ESP exemption and to stop doing business with us. SBC did considerable damage with their tactics, but we’re still here and ready to serve our loyal customer base.”

Meanwhile, Transcom and AT&T are in legal wranglings of their own, but the judge’s ruling regarding SBC has cleared Transcom of wrongdoing toward that carrier.

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