(July 2, 2003) - Verizon Wireless has filed a lawsuit against Nextel Communications Inc. for improperly obtaining confidential information about Verizon Wireless's technology. The suit claims that Nextel acquired two prototype handsets on June 10 and used them to make hundreds of calls on the network. "Nextel's unauthorized testing of Verizon Wireless' prototype push to talk handsets and network allowed Nextel to improperly obtain valuable, confidential and proprietary business information, including but not limited to certain trade secrets belonging to Verizon Wireless," the suit states.

The dispute centers on a service - Nextel Direct Connect - that has helped Nextel to build a huge business customer base with the lowest turnover rate in the U.S. wireless industry. This "push to talk" feature allows customers to use handsets as limited-service walkie-talkies. According to the suit, Nextel knew Verizon Wireless was going to roll out a competing service with nationwide reach, and "embarked on a series of wrongful acts," including corporate espionage. It also alleges Nextel shared the information with an industry analyst to improperly influence industry reviews of Verizon Wireless' new service.

In a statement addressing Verizon's complaint, Nextel says it is "confident that it has conducted itself properly with respect to the allegations" in the lawsuit. "We are therefore baffled by the claims made by Verizon Wireless in its filing," the company said. "We are still in the process of reviewing the filing, but we believe it is entirely without merit and we will defend Nextel vigorously."

Verizon's suit claims Nextel has violated the Federal Computer Fraud and Abuse Act and Federal Communications Commission rules, and Virginia state laws. It seeks an injunction barring Nextel from using or disclosing the information it accessed, as well as compensation and punitive damages.