Project X

After a Southwestern Bell manager saved a woman's life, the phone company celebrated him as a hero. After he complained about what he alleges were racist billing practices, it fired him.

Southwestern Bell customers remained unaware of such disparate treatment, the revenue-management office workers say. "How would they know?" asks Shawn Tankersly, a revenue-management employee who was fired by the company this fall after 15 years. "People in $255,000 houses don't talk to people in $300-a-month apartments about their telephone bills."

The geographic areas targeted for more-rigorous collection procedures are neighborhoods that, according to Southwestern Bell records, consistently produce the largest percentage of unpaid bills and outstanding debts.

Each month, revenue-management supervisors calculate for each geographic area (or "wire center," as insiders call them) the percentage of bad debt compared to total billings. One such report for a period covering January 1994 shows an Oak Cliff neighborhood left the company with $445,055 in unpaid bills--3.14 percent of $1.42 million Southwestern Bell billed customers in the area that month. In comparison, an Addison neighborhood left the company with $448,406 in unpaid bills--just 1.8 percent of the $2.5 million billed in that area that month.

The company, of course, had an economic desire to minimize bad debt to boost profit for shareholders. But Dorsey had a personal incentive. His compensation is linked to the overall debt ratios in Dallas and Fort Worth neighborhoods, according to Hamilton and another former supervisor in the revenue-management department who still works for Southwestern Bell. The lower the bad-debt number, the higher Dorsey's take-home pay.

Hamilton and the others say the revenue-management office supervisors, including Hamilton, intent on keeping a tight grip on bill-payers in the targeted neighborhoods, sometimes pushed staff to skirt a state Public Utility Commission requirement that customers receive 10 days' notice before any termination of service.

The notion of Southwestern Bell systematically treating customers from poorer neighborhoods with more scrutiny and less sympathy offends both consumer and civil-rights activists.

Rick Guzman, the assistant public-utility counsel who said the Project X policies sounded to him like "high-tech redlining," says both PUC guidelines and state law require Southwestern Bell, a regulated utility, to provide service without regard to race.

Guzman and his predecessors at the Office of Public Utility Counsel had not previously heard of complaints about such discriminatory practices, but suspect the silence stems from a lack of consumer knowledge. "This is the kind of thing a customer might feel, but it takes an employee on the inside to know that," says Kathy Grant, who was an information specialist for the watchdog agency and now works as lobbyist for an Austin law firm.

Craig Murphy, an Oak Cliff resident and Democratic Party precinct chairman, had a personal reason to suspect Southwestern Bell was treating residents of his neighborhood harshly. Last year, Murphy recalls, he had fallen one month behind on payments for a second telephone line that had recently been installed in his home office. Southwestern Bell shut off his service--without notice, Murphy says, although he concedes the company claimed it had warned him. Murphy received such treatment, he says, even though he had consistently paid his phone bills on time for 15 years. A supervisor reinstated his service and "popped out with the fake apologies," Murphy recalls.

Murphy remains unhappy about how quickly the plug was pulled and suspects the location of his residence had much to do with the swiftness of the termination. Southwestern Bell "should take the time to use a more reasonable standard" than geographic lines to determine who merits credit, he says.

Plenty of other Southwestern Bell customers have lodged complaints with the Texas PUC. In a recent five-month period between September 1, 1995, and January 26, 1996, the commission's records show it received 59 complaints about billing issues--20 about service terminations, 20 about discontinued service, seven about inadequate or no-notice cutoffs, and four about the company's handling of delinquent payments.

Kathy North, manager of consumer affairs for the PUC, says that the formal complaints filed with her agency most likely massively underrepresent consumers' problems with Southwestern Bell. "Most people don't know we exist, and the company has no obligation to report complaints to us," says North.

She identifies the Texas PUC as one of the nation's least aggressive in policing such matters. "We don't get into the details of their [Southwestern Bell's] business practices," she says.

PUC rules give the telephone company freedom to handle customers disparately. As long as the company is filling 95 percent of service requests within seven days and giving 10 days' notice before terminating service for delinquent payment, it is operating within the PUC guidelines.

But as North concedes about Southwestern Bell, "They know how to get around the rules."

Doug Hamilton concedes that he never intended to sacrifice his job to fight discriminatory practices at Southwestern Bell. Though he had voiced complaints about Project X over the years, he says he did so gingerly--at first. "I had to protect my job," he says.

Hamilton says his conflict with supervisors over Project X worsened in the months after he pulled Elisa Moore from her sinking Mustang. The emotionally draining experience, he says, led him to begin acting less cautiously, more irritably, and more impulsively--both at the office and elsewhere.

In fact, the brush with death had thrown both Hamilton and Moore into emotional tailspins.

At the scene that day in October 1994, the two strangers had hugged each other as they climbed out of the water. Moore then thanked Hamilton. "By the way, what's your name?" he asked. She told him her first name and then climbed into a police cruiser for a lift home.

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