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Telecoms ask court to block new FCC rules

Verizon and Qwest asked a federal court to block temporary rules by the FCC forcing the companies to lease phone lines to rivals for at least another six months.
/ Source: Reuters

Verizon Communications Inc. and Qwest Communications International Inc. asked a federal court Tuesday to block temporary rules by the U.S. Federal Communications Commission forcing the companies to lease phone lines to rivals for at least another six months.

In a filing with the U.S. Court of Appeals for the District of Columbia, Verizon and Qwest said the FCC's temporary rules released Friday contradict previous court rulings. Their filing was backed by the United States Telecom Association, the industry trade group for dominant local phone companies.

The FCC's temporary rules set a six-month freeze on wholesale rates for leasing access to the major U.S. local telephone networks to try to preserve competition.

The commission had required the four major local telephone carriers or Baby Bells — Verizon, Qwest, SBC Communications Inc. and BellSouth Corp. — to lease access to rivals at government-set rates in order to promote competition for local service, but the appeals court threw out the rules in March.

In their filing, the companies contend the FCC has no power to extend the requirement for leasing lines beyond the court's ruling. They also say that after eight years of legal fighting and three major court rulings, "enough is enough."

"It is simply inexcusable for the FCC to flout a binding judicial determination yet again, and to extend those never-lawful requirements for nearly another year," the companies said.

Since the four big local carriers own the wires into most homes, competitors lease access to offer their own service and have said the rules were needed to enable them to compete.

Even before the FCC released its temporary rules, a number of Bell competitors said they were scaling back local services due to the changes. AT&T Corp. has said it will stop seeking new local and long-distance residential customers, and MCI Inc. is scaling back marketing.

The Bells have agreed to maintain wholesale prices until the year's end, but analysts expect price hikes to follow.