The state requires local phone companies to give 30 days' notice if they plan to stop offering service, but there is little that can be done if the company is out of business, Choura said. The commission also requires local phone companies to get a state license to offer service, but companies are not required to submit dissolution plans. Similar problems cropped up earlier this year when NorthPoint Communications , a high-speed Internet company, filed for bankruptcy, leaving customers in western Michigan without service. Bahri said Midwest Telcom, which had nine employees, began offering service in December 1999 after agreeing to resell Ameritech phone service. Under deregulation, incumbent local companies, such as Ameritech, must allow competitors to resell their service at a discount.
Competitors use that discount to bill and market to customers.
The incumbent phone company provides the phone line and maintenance to that line but does not deal with customers directly. Both quit, saying they couldn't make money. Bahri said Ameritech, Michigan's dominate phone provider with 5.5 million lines, made it difficult to compete because it did not service Midwest Telcom's lines quickly and often put off the smaller company's request for information. But Ameritech spokesman Mike Barnhart said the company did nothing to stand in the way of Midwest Telcom success.