US Regional Phone Companies Challenge FCC Competition Rules

by Glen Shapiro, LawAndTax-News.com, New York

30 January 2004

The US Federal Communications Commission (FCC) came under fire from all sides this week over its competition rules for telephone and internet services.

In a new hearing at the US Court of Appeals for the District of Columbia, regional telephone companies such as BellSouth Corp, SBC Communications, Verizon Communications, and Qwest Communications argued against an earlier FCC decision to oblige them to lease portions of their local networks to competitors at steeply discounted rates for at least three more years, arguing that this puts them at a competitive disadvantage with cable companies that are not required to share their lines with rivals.

Meanwhile, competitors of the so-called "Baby Bells" argued that FCC rules which allow the regional firms to keep their high speed fiber optic lines away from rival internet providers are unfair.

According to the Associated Press, speaking to the court, attorney for MCI, Donald Verrilli suggested that essentially the telecoms firm will be "out of business" if it is not permitted access to the Baby Bells' fiber optic lines.

However, FCC lawyer, James Carr argued that:

"Competition in the broadband market is really in its infancy. To say the incumbents have some sort of market power, I think the arguments are premature."

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