Reply #17: In Pivotal Case, Bush Backs Off Rule That Eased Phone Line Fees

[UpInArms]

http://www.nytimes.com/2004/06/10/business/10PHON.html?ex=1087444800&?en=4e7155c0a048e491&?ei=5062&?partner=GOOGLE

WASHINGTON, June 9 — In a move that critics say could lead to higher telephone rates, the Bush administration on Wednesday sided with the four regional Bell companies in a court case over the fees they charge their rivals for access to their networks.

The administration's decision, which could affect the phone bills of nearly 50 million customers across the country, was a significant policy reversal in a case making its way to the Supreme Court.

Justices are being asked to review an appeals court decision that struck down a set of regulations requiring the Bell companies — Verizon, SBC Communications, BellSouth and Qwest Communications — to make their networks available to rivals at heavy discounts. The appeals court decision will take effect next week unless the Supreme Court intervenes.

The solicitor general, on instructions from the White House, dropped out of the case on Wednesday after unsuccessfully trying to defend the regulations in the appeals court. The decision substantially reduces the chances that the Supreme Court will accept the appeal, particularly because the Federal Communications Commission, which had been pressured by the administration, also reversed course and said it had decided not to pursue an appeal either.

Both sides in the matter agree that if the Supreme Court does not alter the appeals decision, a central element of the landmark Telecommunications Act of 1996 will effectively be repealed. The act requires the Bell companies, which have long been criticized for holding near- monopoly positions in local markets, to make valuable pieces of their networks available at low rates to both small and large rivals, enabling them to offer cheaper service than they otherwise might.

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