TELECOM Digest OnLine - Sorted: Appeals Court Backs FCC on Bell Network Access

Appeals Court Backs FCC on Bell Network Access

Reuters News Wire (
Fri, 16 Jun 2006 16:37:27 -0500

A U.S. appeals court on Friday upheld the Federal Communications
Commission's latest attempt to ease requirements that the large
telephone companies lease their networks to competitors at
government-set rates.

A divided FCC ruled in December 2004 that companies such as AT&T
Inc. and Verizon Communications should only have to continue providing
discount rates for rivals to serve business customers where
competition is lacking.

Under the new rules for the residential market, the big carriers,
known as the Baby Bells, would no longer have to provide the access to
their networks that has allowed rivals to serve homes at a low price.

The FCC set a transition period for the new regulations to take
effect. Still, the Bells and competitor Covad Communications Group
Inc. appealed the decision.

"Because we conclude the commission's fourth try is a charm, we deny
all of the petitions for review," a three-judge panel on the
U.S. Court of Appeals for the D.C. Circuit.

The FCC has tried for almost a decade to set local telephone rules to
promote competition for service, but the three previous attempts were
struck down by the court.

"The commission is pleased that the court has upheld its
pro-competitive rules governing network unbundling. The court's
decision provides long-awaited certainty for the telecommunications
industry and consumers," an FCC spokesman said in a statement.

To boost competition, the 1996 Telecommunications Act authorized the
FCC to require, if necessary, the Bells to unbundle pieces of their
networks so competitors could lease, repackage or use them to offer

Jim Kirkland, Covad's general counsel, said the decision added to
recent stability in the industry and any price increases the company
has seen were absorbed and did not have a material impact on its

Covad competes with Verizon and AT&T, but it also rents local
telephone lines from these companies to sell business customers
high-speed Internet links and Web-based telephone service.

"You've seen a whole new era of stability and greater increase in
investor interest in the competitive sector," he said.

The earlier battles over the rules pitted the Bells against Covad and
long-distance and telephone giants AT&T and MCI Inc. But in the last
year, SBC Communications acquired AT&T and kept that company's name,
while Verizon bought MCI, which ended much of the fight.

Copyright 2006 Reuters Limited.

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