I believe the following is huge news long term. The carriers continue to get thwarted by the appeals court.
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Tuesday October 14 10:10 PM EDT
Court throws out key FCC rules on local phones
By Roger Fillion
WASHINGTON, Oct 14 (Reuters) - A U.S. appeals court on Tuesday threw out key federal rules designed to make it easier for long-distance carriers and others to offer local telephone service in competition with the regional Baby Bells.
In a victory for the Bells, GTE Corp. and other local phone monopolies, the St. Louis-based court said the Federal Communications Commission's rules for opening the $100 billion local phone market do not square with last year's Communications Act. It was the second such defeat for the FCC.
The FCC regulations, which stem from the act, require the Bells and GTE to lease pieces of their local phone networks to rivals, and then to recombine those ''unbundled elements'' at no extra cost so rivals could offer their own local service.
''This decision will have the effect of significantly delaying -- perhaps even preventing -- many Americans from being able to have more than one choice for their local telephone company,'' outgoing FCC Chairman Reed Hundt said. He predicted the Supreme Court would reverse the decision.
Among the parts of the network that could be leased are the central office switch and the local loop that runs between the central switch and a customer's home.
The three-judge panel's ruling, however, now leaves in the hands of long-distance giants AT&T Corp., MCI Communications Corp. and others the potential costly task of joining back together the different elements of the local network.
AT&T and other Bell rivals -- in an effort to enter the local phone business in the cheapest way -- had hoped to lease the network in parts, but then have the Bells and GTE put the pieces back together free of charge.
''This blocks AT&T local's strategy. It forces them to be more than rebranders and to get into the local market and begin creating their own local service,'' said analyst Scott Cleland of Legg Mason Precursor Group, the research arm of the Baltimore-based brokerage.
Attorney Philip Verveer of Willkie Farr & Gallagher said of the court's decision: ''It sounds like once again the Bells got what they wanted out of the Eighth Circuit.''
In July, the same court threw out landmark FCC rules governing the prices at which rivals can hook up to the Bell network. The judges said the agency had overstepped its authority and trampled on state powers.
In a related development, the appeals court also said it would consider a request by state regulators to bar the FCC from wielding a key power when deciding whether to let the Bells enter the $80 billion long-distance business.
The states want to prevent the FCC from having a say over what prices the Bells can charge new competitors who want to hook up to the Bell network and offer their own brand of local phone service.
More news for referenced ticker symbols: AIT, BEL, BLS, GTE, MCIC, T, and related categories and industries: Computer-Telecom, telecommunications, stock capsules, treasury. |
