updated 3/24/2004 3:11:32 PM ET 2004-03-24T20:11:32

The Supreme Court said Wednesday that states may block cities and other local governments from setting up shop as phone service providers.

The court ruled 8-1 that while Congress intended to broaden competition in the telecommunications field, it did not mean to set up messy confrontations among states, private phone companies and local governments.

Justices had been asked to interpret the 1996 telecommunications law designed to bring consumers nationwide choices in phone service.

The law says that states may not prohibit “any entity” from getting into the phone business. That does not include political subdivisions of states, said Justice David H. Souter, writing for the court.

Justice John Paul Stevens filed the lone dissent. He said that the court was not deciding the public policy question of whether local telephone service is a good idea.

The cases are Federal Communications Commission v. Missouri Municipal League, 02-1386; Nixon v. Missouri Municipal League, 02-1238; and Southwestern Bell Telephone v. Missouri Municipal League, 02-1405.

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