A federal appeals court today overturned an FCC order that gave states the authority to determine what parts of the local phone network the regional Bells must lease to rivals such as AT&T Corp. at discounted rates.
The U.S. Court of Appeals for the District of Columbia Circuit also said it was unlawful for the FCC to make a national finding of “impairment.” In a nearly 600-page order the FCC issued last year governing phone and broadband rules, the regulator declared local phone companies are impaired without being able to lease Bell switches used to route phone calls from homes and small businesses.
The Bells have seen steady erosion in their core phone business in recent years due partly to local phone companies leasing their networks, wireless substitution and the predominance of e-mails.
The ruling signaled a victory for BellSouth Corp., SBC Communications Inc., Qwest Communications International Inc. and Verizon Commmunications Inc.
Some trade groups representing phone companies competing with the Bells called on the FCC to appeal the decision before the U.S. Supreme Court.
“It is the ultimate responsibility of the FCC and states to protect consumers, encourage economic development, and ensure that competition is allowed to develop, rather than being quashed by a deregulated monopoly,” CompTel/ASCENT Alliance CEO H. Russell Frisby, Jr. said. “Today, a federal appeals court has usurped that responsibility. Unless the FCC takes the necessary action and seeks Supreme Court review, we fear that consumers and our nation’s economy will bear the brunt of the court’s decision.”
The federal appeals court granted a stay for 60 days or no later than the denial of a petition for a rehearing.
“This deadline is appropriate in light of the commission’s failure after eight years to develop lawful unbundling rules and its apparent unwillingness to adhere to prior judicial rulings,” the court said.
