[[Update]] Telecommunications Law Challenged
" guilty of anti-competitive behavior without a trial..."
"It's a restriction of freedom of the lines of business one can go into."
July 10, 1998
NEW ORLEANS - The Associated Press via NewsEdge
Corporation : Regional Bell telephone companies eager
to enter the $80 billion long-distance market asked an
appeals court Thursday to strike down parts of a historic
law designed to spur telephone competition.
Lawyers for the Baby Bells argued that Congress
singled out and blocked the companies from providing
long distance and other services when it approved the
1996 Telecommunications Act.
But a top government antitrust lawyer told a three-judge
panel of the 5th Circuit Court of Appeals that the
companies simply don't want to follow rules they agreed
to in order to offer long-distance service to their own
customers.
To do so, the Bell companies must show regulators that
they have sufficiently opened local telephone markets to
competition from long-distance companies such as
AT&T and MCI Telecommunications.
But the Federal Communications Commission has yet to
grant a regional company permission to enter the
long-distance market. After SBC Communications was
turned down for long-distance service in Oklahoma, the
company filed suit.
In a surprise New Year's Day ruling, a federal judge in
Texas sided with SBC and said that the Telecom Act
essentially declared the regional Bells guilty of
anti-competitive behavior without a trial.
On Thursday, Harvard University professor Laurence
Tribe urged the appeals panel in New Orleans to uphold
the ruling, saying Congress acted as judge and jury and
penalized the Bell companies when it passed the 1996
law.
''What is happening here is a restriction of freedom,''
Tribe said. ''It's a restriction of freedom of the lines of
business one can go into.''
But a Justice Department lawyer said the regional Bells
never suffered, and actually ended up being able to do
more business than they could before the law was
passed, such as providing long-distance service outside
their regions.
Congress was simply trying to provide some structure to
an already regulated industry undergoing revolutionary
change, said Joel Klein, Assistant U.S. Attorney General
in charge of the department's antitrust division.
Klein also criticized the regional Bells for helping fashion
the Telecom Act and then trying to have key provisions
struck down 18 months later.
Judge Grady Jolly picked up on that theme, asking Tribe
why phone company officials negotiated terms with
Congress and accepted the legislation but opposed it
later.
''You gave up something and you got something,'' Jolly
said.
Consumers' phone bills could go up if the regional Bells
prevail and are able to restrict customers' access to
long-distance service choices, said Gene Kimmelman, a
telecommunications expert and co-director of Consumers
Union, the publisher of Consumer Reports.
''The danger of treating the Bell companies like a Mom
and Pop company is that they are in a position to block
competition,'' he said.
But SBC, which operates as Southwestern Bell, Pacific
Bell and Nevada Bell, said it has helped increase
telephone competition and will continue to do so.
''We believe our case is based on a solid foundation of
constitutional law,'' said Jim Ellis, SBC's general counsel.
''If today Congress can single out 20 big companies,
tomorrow it could target any group, organization or
individual for special constraints or punishments.''
[Copyright 1998, Associated Press]
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