Review of Phone Ruling Sought

Demonstrating unusual bipartisanship, leaders of the House Judiciary Committee on Thursday asked the attorney general to seek U.S. Supreme Court review of the telephone competition rules overturned last week by a federal appeals court.

Chairman F. James Sensenbrenner Jr. (R-Wis.) and ranking minority member John Conyers Jr. (D-Mich.) wrote in a letter to U.S. Atty. Gen. John Ashcroft that the ruling by the District of Columbia U.S. Circuit Court of Appeals “raises questions of great public importance and could cause potential disruption of the nation’s phone service.”

The court threw out rules governing the access that companies like AT&T; Corp. have to local networks owned by the Baby Bells, including SBC Communications Inc.

“If access to the Bell companies’ local networks is no longer available -- a result that this decision threatens -- millions of Americans will lose the ability to purchase service from the local telephone provider of their choice,” Sensenbrenner and Conyers wrote.

The two House leaders, who staffers say rarely sign any committee letter together, want the Justice Department to support the Federal Communications Commission in asking the nation’s highest court to stay the circuit court order and hear the appeal.

“That these two leaders could reach across partisan lines on a core question of federalism while the case is still in litigation shows how flawed the [appellate] decision is,” said Brad Ramsay, general counsel of the National Assn. of Regulatory Utility Commissioners, an organization of state regulators overseeing utilities. “NARUC could not agree more with the sentiment that Supreme Court review is imperative.”

Bruce Fein, a former FCC general counsel, said “lobbying has been fierce” by both the Bells and their competitors to sway the Justice Department, which handles appeals of federal agencies through the solicitor general’s office.

Agencies can always appeal to the Supreme Court on their own, but without the solicitor general behind them, Fein said, their chances of getting the court to take the case are “slim to none.”

“The stakes are enormous here,” he said. “The circuit court’s decision could cripple the competitive industry.”

The Bells insist other companies will still have access to their networks.

“Our competitors had access to it yesterday, they have access to it today and even after the court’s decision, they’ll have access to it tomorrow,” said Dave Pacholczyk, a spokesman for SBC, California’s dominant local phone company.

He noted that more than 20 members of Congress, including House Speaker J. Dennis Hastert (R-Ill.), supported the court’s decision and urged the FCC not to appeal.

FCC Chairman Michael K. Powell also doesn’t want to appeal the case. He had issued a strongly worded dissent to the telephone competition rules that the FCC adopted last year, and the Bells followed his reasoning in their case before the circuit court.

“There’s no reason to believe the [circuit] court decision would result in the Bell companies’ local networks no longer being available,” said Eric Rabe, a spokesman for Verizon Communications Inc., California’s second-largest local carrier.

Rabe said that with wireless and cable companies already competing and voice-over-Internet protocol technology about to explode, Bell companies want to generate a wholesale business, but not at the regulated prices the Bells say are too low.

Some relief came SBC’s way Thursday. In Ohio, state regulators hiked the wholesale lease rates for equipment that rivals have to pay SBC, which is also the dominant local carrier there. The $2- to $3-a-month hike prompted AT&T; to drop two of its popular low-priced plans, though it will continue offering several higher-priced bundled plans.

Meantime, a Small Business Administration survey released Thursday showed that the nation’s smaller companies benefit from competition. About 22% of them have switched local service to competitors, the administration said.

“On issues like competition and broadband service, the discussion has focused on individual consumers,” said Thomas M. Sullivan, chief counsel of the SBA’s Office of Advocacy. “But small businesses are major consumers of telecommunications services, too. This report will help policymakers understand how their decisions will affect innovative and job-generating small businesses.”