Subject: [NEXTEL-1] Court Strikes Phone Network Sharing Rules

From: Marcelrf <[email-masked]>
Date: Wed, 03 Mar 2004 00:35:54 -0500

Court Strikes Phone Network Sharing Rules

Tuesday March 2, 5:16 pm ET
By Jeremy Pelofsky

WASHINGTON (Reuters)

A U.S. federal appeals court on Tuesday handed a huge
victory to Verizon Communications and other traditional
local telephone companies, striking down rules that required
them to share their networks with rivals at cut-rate prices.
The U.S. Court of Appeals for the District of Columbia said
the Federal Communications Commission erred in delegating
to state regulators decisions about whether new entrants into
the local market are impaired from competing for customers.

The FCC's definition of being at a disadvantage "is vague
almost to the point of being empty," Judge Stephen Williams
said in the 62-page decision written for the three-judge panel.
The court also said the FCC had failed to justify giving
competitors discounted access to those local networks.

The 1996 Telecommunications Act sought to promote competition in
telephone
markets, requiring the dominant local carriers to open their networks to
competition if they wanted to enter the lucrative long-distance
telephone
market.

Since then, the regional Bell local telephone companies and
long-distance
carriers like AT&T Corp. have been battling over the rules governing
sharing
networks and for customers.

Verizon, BellSouth Corp., SBC Communications Inc. and Qwest
Communications
International Inc., have fought government rules requiring them to lease
parts of their networks to rivals at rates they argue are below cost.

"This appears to be a victory for those who support markets free of
rules
that have repeatedly been judged illegal and which have eliminated jobs,
shrunk investment and hurt fair competition," said SBC President William
Daley.

AT&T, MCI, and other upstarts in the local telephone market have
contended
they need cheap access to the dominant networks to compete. They have
signed
up millions of customers through that process.

"The right of all Americans to choose their local telephone service
provider
is at stake, and the advancement of competitive broadband services is at
risk," said AT&T General Counsel Jim Cicconi.

Shares of Bells advanced on the decision between 2 percent and 5
percent.
Meanwhile, shares of long-distance carriers, which are moving into the
local
business by leasing parts of the Bells' networks, fell about 1.3
percent.

The three FCC commissioners who approved the rules, over the objections
of
Chairman Michael Powell, vowed to challenge the decision. In a joint
statement they said they were seeking a stay and would appeal the
decision
to the Supreme Court.

The court did uphold the agency's decision to phase out line-sharing,
where
a consumer can have one provider for high-speed Internet access and
another
provider for traditional voice telephone service, a service offered by
Covad
Communications Group Inc.

However, the judges scratched the FCC's rules that would have permitted
wireless telephone carriers to receive cheaper rates for calls that
travel
over the wired networks and told the agency to try again.

"I have already directed the staff to begin preparing new rules that
will
provide the sorely needed clarity and guidance essential to bringing
consumers the benefits they were promised and deserve," Powell said.

http://www.google.com/url?sa=X&oi=news&start=0&num=2&q=http://www.reuters.com/financeNewsArticle.jhtml%3Ftype%3DbusinessNews%26storyID%3D4482433

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