Carriers' Woes Hamper Agents' Ability To Collect

Some agents said they have been waiting as long as a year for commissions, which impedes their ability to pay expenses.

Last week, master agent PentaStar Communications said it could not meet current cash obligations, including payroll, and is in default with its lenders. The reason: an inability to collect $3 million from various carriers, the company said.

One agent executive familiar with that situation said PentaStar was let go from Verizon's program, which is causing the payment delay. However, he said, Verizon plans to make the payment over time.

PentaStar executives could not be reached for comment.

Rob Goble, CEO of Venicom, a master agent based in Phoenix, said he is waiting for $2 million in commissions from carriers. "Carriers, in general, are slow in paying their agents," he said. "Global Crossing [which recently filed for Chapter 11 bankruptcy protection owes us about $100,000."

Steve Seier, director of carrier services at Expanets, lost commissions when Net2000 Communications filed Chapter 7. But he said the Englewood, Colo.-based company is having no trouble collecting from any of its other carriers.

"We are not experiencing any interruptions or delays in carriers' payments to us," Seier said. "The only case was a bankruptcy, and there's really nothing you can do" in that situation.

Carriers' financial woes are exacerbating the situation, industry observers said. A number of carriers have reported heavy losses and mounting debt.

The Securities and Exchange Commission last week sent inquiries to WorldCom and Qwest Communications International. Global Crossing, meanwhile, is the subject of a formal SEC investigation.

The SEC's request for information centers on Qwest's accounting policies, practices and procedures in 2000 and 2001.

In WorldCom's case, the inquiry is wide-reaching, questioning loans it made to executives, a onetime charge in 2000 and customer billing practices, among other issues.