Appeals Court Ruling Favors Dominant Telephone Providers
Posted on: Thursday, 4 March 2004, 06:00 CST
Mar. 4--Goodbye choices, hello higher phone bills.
That's what some telephone companies are saying after a court decision Tuesday that dominant providers such as BellSouth Corp. don't have to offer deep-discount prices for other carriers to use their equipment.
The decision by the D.C. Circuit Court of Appeals said the Federal Communications Commission cannot force BellSouth (NYSE: BLS, $28.60) and the other local phone giants to lease their networks at government-regulated prices. Competing phone companies say if prices go up it would be too expensive for them to operate, and they would not be able to offer local phone service.
About 600,000 Floridians get a dial tone from a company other than the state's three top local phone carriers -- BellSouth, Verizon Communications and Sprint-Florida Inc. More than 300 other companies are licensed to sell local phone service, but few of them actually do so, according to the Florida Public Service Commission.
"Without competition, those 600,000 Floridians will be left with no choice for local phone service and have to return to the days of monopoly providers and price," said Mark Long, executive director of the Tallahassee-based Florida Competitive Carriers Association.
The ruling goes into effect in 60 days, but some FCC commissioners are talking about taking the issue to the U.S. Supreme Court.
BellSouth praised the ruling, saying consumers would benefit from market-based competition.
The court ruling also puts on hold indefinitely state regulatory hearings on phone competition that began last week. The PSC's staff and the phone companies would hold an informal teleconference on the matter in 30 days, commissioners said Wednesday.
"Circumstances have transpired to make this proceeding unnecessary, and we're going to have to wait to see how to go forward," PSC Chairman Braulio Baez said.
The court ruling is the second part of a one-two punch for Floridians, who face higher local phone rates as a result of a PSC decision made late last year. The PSC approved allowing the state's three local phone companies to raise basic residential local phone rates in exchange for lowering what they charge other phone companies to use their lines.
Florida's attorney general and public counsel are challenging the decision in court, however, and others want new legislation to clarify the ruling.
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