Newspaper article THE JOURNAL RECORD

Court to Settle Phone Dispute

Newspaper article THE JOURNAL RECORD

Court to Settle Phone Dispute

Article excerpt

WASHINGTON (AP) -- The Supreme Court agreed Monday to settle a dispute among traditional local phone companies and their upstart competitors that could affect consumer choices and prices for basic phone service.

The court will look at a complicated fee structure set up to determine how much new competitors must pay for access to the vast network of existing phone lines.

Local phone companies, their rivals and the Federal Communications Commission all asked the Supreme Court to get involved, but for different reasons. The local phone companies would like to see portions of the FCC price rules tossed out. Rivals and the regulators want the court to clarify the rules or reconcile conflicting lower court interpretations of them.

The dispute grew out of the 1996 Telecommunications Act, in which Congress rewrote the rules for competition and service across a wide swath of old and emerging communications fields. One goal of the huge regulatory overhaul was elimination of monopoly control over local phone service, a $110 billion market, with the idea that consumers would benefit from lower prices and greater choice.

Proponents of local phone competition hope overhaul will one day mean the same kind of choice that consumers now have for long- distance service. For now, more than 90 percent of the country still gets local service from a Bell company that was a part of AT&T before it was broken up.

New local phone providers that compete for business typically use all or portions of the same network of lines and switches that the old Bell companies use.

In response to the 1996 law, the FCC set up a fee structure for rivals to gain access to the old Bell networks.

The FCC decided the rivals should pay according to the current and future worth of the network and its services.

The former monopolies complained that in doing that, the FCC ignored the phone companies' cost to build and maintain phone systems over the years.

Lawyers for Verizon Communications, a conglomeration of former Bells and GTE that is now the nation's largest local phone provider, argued in court papers that the FCC acted like "an omnipotent central planner. …

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