NSA Phone Database Story Continues to Crumble

First Bellsouth and Verzion denied they gave NSA call data and even denied they were asked, now Bellsouth is rasing the bar and demanding a retraction.

BellSouth demands USA Today retract NSA claims

WASHINGTON (Reuters) – BellSouth Corp., the No. 3 U.S. local telephone company, on Thursday demanded USA Today retract claims in a story that said the company had a contract with a U.S. spy agency and turned over customers’ telephone records.

BellSouth spokesman Jeff Battcher denied the company had a contract with the National Security Agency and did not give access or provide call records to the spy agency as part of an effort to thwart any terrorist plots.

USA Today reported last week that the NSA has had access to records of billions of domestic calls and collected tens of millions of telephone records from data provided by BellSouth, Verizon and AT&T Inc..

“BellSouth insists that your newspaper retract the false and unsubstantiated statements you have made regarding our company,” BellSouth said in a letter to USA Today President Craig Moon and the general counsel at the newspaper’s parent company Gannett Co. …

“We did receive the letter this afternoon. We’re reviewing it,” said USA Today spokesman Steven Anderson. “And we will be responding.”

BellSouth’s Battcher said the company resorted to demanding the retraction because the newspaper had not retracted the story after the company’s denial issued on Monday. Plus, the company was facing lawsuits claiming that customers’ privacy rights were violated.

BellSouth on Tuesday was added to a $200 billion lawsuit which accuses the three large telephone carriers of violating privacy rights by turning over customer phone records for use in the NSA program.

I mentioned in the last piece the big telcos were likely to be sued over this and that was one of the reasons for the strong denial. That turned out to be dead on.

It will be interesting to watch how USA Today responds. When the media goes after Bush with a concocted story, there is no artificial deadline to retract it. In the Rathergate case, CBS never would have retracted the story without the continued blogosphere pressure. This case is different in that it could possibly cost Bellsouth a quarter of a trillion dollars and unlike Bush, they can take action against the paper.

If the paper stands by the story, they themselves stand to be sued for billions by the telcos or by the shareholders who have seen their share value decrease. If they retract the story they join CBS in being suckered by a bad source.

The pressure for USA Today to either back up the story or retract it is going to be quite strong. I don’t think this one will drag on for weeks like Rathergate. When Bellsouth takes off the gloves, something is going to happen quickly.

And unless Bellsouth is bluffing, Dan Rather and Mary Mapes may soon have company on the wall of shame.

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