June 9, 2004 6:05 PM PDT

Bush administration won't appeal phone decision

In a blow to long-distance phone companies, the Bush administration won't ask the Supreme Court to reinstate rules forcing local phone carriers to share parts of their networks with rivals.

As a result, it appears that the Federal Communications Commission also will not seek a Supreme Court review of the issue.

Commissioner Kevin Martin said Wednesday that he no longer wants to ask for the court review, and his change of heart means the five-member FCC commission is unlikely to favor the move.

The FCC has yet to announce whether it will, as a group, seek the appeal. A representative could not be reached Wednesday for comment. An FCC-led appeal is considered the strongest legal effort left to keep the rules in place.

Martin's comments came after U.S. Solicitor General Theodore Olson, who represents the federal government in cases before the Supreme Court, earlier Wednesday handed the FCC his decision against the appeal. The move is one of the first indications that the Bush administration is in favor of throwing out the rules.

Martin, in a statement, said he's following the Bush administration's lead, which earlier in the day said it would not to seek a court review. "Because the solicitor general decided not to support the FCC's appeal, I no longer support appealing the D.C. Circuit's decision," Martin said.

There is still a U.S. Supreme Court appeal in the works, albeit one with little chance of success. On Thursday, utility regulators in Arizona, Michigan and California are expected to file their own appeal, according to a representative for the effort. "Ours is the weakest of the alternatives right now," the representative concedes.

The Bell operating companies have promised little immediate impact, saying service will continue uninterrupted.

"We applaud the Bush administration for making a tough call today, but one that will bring the benefits to consumers of a stepped-up investment in advanced telecommunications networks by competing providers," Verizon said in a statement.

AT&T, MCI and other long-distance providers say that left to their own devices, the Bells will ultimately raise their rates to anticompetitive levels.

The Computer Technology Industry Association, or CompTIA, agreed. "Most assuredly, this lack of leadership will have broad, negative repercussions for consumers and the IT industry," Tom Santaniello, manager of U.S. public policy for CompTIA, said in a statement. "Local phone rates will rise, service quality will fall, and IT innovation will vanish."

The dispute centers on a decision the FCC made in August, when it said states could set rules that force the big local phone companies to share portions of their networks with AT&T, MCI and other competitors to spur competition.

The local phone companies protested, and in March, the U.S. Court of Appeals for the District of Columbia said that the FCC was wrong and threw out the rules.

On Wednesday, AT&T promised to continue its legal maneuvering and keep the pressure on state public utility commissions. The carrier said the decision has "in one stroke changed the legal and policy position (the Bush administration) has maintained since it took office."

A representative for one of the four Bell operating companies had no immediate comment. A representative for President Bush could not immediately be reached for comment.

The Bush administration decision to try to end the legal infighting comes as no surprise. Nearly every attempt by the FCC to write rules enforcing competition in the local phone companies' territories has prompted years of lawsuits and bitter criticism from all sides.

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Cry Babies
You can always tell when a liberal writes an article - they always blame it on George Bush as if he directly has anything to do with it. Besides, CLECS have had a free ride long enough - go build your own damn network!
Posted by Short Circuit (6 comments )
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What??!
Did you read the same article I did? Let me see if I
understand you correctly. You propose that each
network provider build their own network? Do you
have any conception of what you are proposing? If we
followed your line of resoning we would only have
basic "POTS" phone service and nothing more. There
would be no innovation and possibly no internet.
Each provider cannot provide it's own network.
Posted by Johnny Mnemonic (374 comments )
Link Flag
Build you own network? Moronic!
CLECs build their own network? Be serious. The Bells' networks were all built with public subsidy money over the last 100 years. Public money off which the Bells enjoyed making huge vast profits over the years.

Cry Babies? YES The BELLS are cry babies trying to get back their monopoly status and using the power of their ability to sustain huge litigation costs that hte competitors can ill afford to do it.

I happen to be a died in the wool Republican, but Bush's move today is the most stupid thing I have seen.

It is obvious that the various parties involved: the solicitor general, the lone republican FCC regulator who was breaking ranks with his fellow repbulican FCC regulator and Michael Powell himself were all pressured immensely to CHANGE their stances on this issue by the White House who (admittedly in a NY Times article) has reaped huge campaign contributions from the Bells.

Bush deserves to not be re-elected over this. It was a stupid move by the Administration and I hope the Supreme Court decides to overturn anyway, although I doubt it will.

I believe the effect of this will actually be to hasten the migration of telephony to the VOIP platform which favors the cable network's broadband connections over the phone companies' networks.

So the Bells will get back thier monopolies over time, competitive companies will dry up and disappear, rates will rise in Bell-land for network based service, and cable companies will benefit unless thier networks are deregulated too. The only losers are the upstart competitors and the rate payers.
Posted by (6 comments )
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How easily we forget the past.
How easily we forget the past.
I started with the telecommunications industry as an installer/ repairman in 1968 and left, (after having been manager with experience in multi-million engineering projects and support over 14 states of computer users), when I saw the handwriting on the wall in 1990.
Since then I have had the opportunity to observe the continued insanity of dissolving the Bell System in 1983. I still throw darts at Judge Greens picture.

Remember how competition would reduce our basic telephone rates? Wheres the reduction? For that matter, wheres the competition?

Making the local phone companies share their established infrastructure, for far less then their actual cost was robbing from the people who had already paid for its existence  the public.

To make matters worse, because the phone companies had to reduce their charges to big business just to compete with the newcomers who saw bucks to be made, residence rates had to be increased to start reflecting the actual costs of providing service. After almost a hundred years of the government allowing business to be over-billed and having that money subsidize the high expense of providing service to low density residence areas, suddenly residence was subsidizing big business. Sadly, residence users couldnt take the telecommunications tax write-offs that business could.

If the public only truly knew how badly they had been shafted by the previous government and judicial decisions that created this morass of idiocy they would be cheering that these decisions have been made by the courts and the current administration.

If these whining businesses cant actually provide end-to-end service on their own, and incur all the true expenses associated with providing the service, they dont belong in the business.

While you thinking about all this stop and try to remember what great inventions have been discovered by Bell Labs since the 1983 break-up. If youll care to remember they created the first computer, the first color television, the transistor, the laser, the first telecommunications satellite just to name a few. But sadly, that was before the government decided that they could run things better.

Joseph M. Mraz
Posted by (1 comment )
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