AT&T Corp. and MCI Inc. joined several other telephone companies yesterday in asking the Supreme Court to block an appeals court decision to throw out rules requiring regional phone giants to lease their network to rivals at deeply discounted rates.
The request was made the day after the Bush administration announced that it would not appeal the lower court's ruling. Unless Chief Justice William H. Rehnquist agrees to stay the lower court's decision, the Federal Communications Commission rules will go off the books on Tuesday.
Filing their own request was a group of state regulators who say that the decision usurps their authority to regulate local telephone markets.
The rules provide a framework for state regulators to set fees that regional phone companies such as Verizon Communications Inc. may charge rivals for access to their networks.
Consumer groups say the decision by the U.S. Court of Appeals for the D.C. Circuit will result in higher fees and may force some companies to abandon markets where they now compete in the local phone business.
FCC Chairman Michael K. Powell said yesterday that the agency will soon attempt to write new rules that would address the concerns raised by the appeals court. He also said the FCC will protect consumers from sudden rate increases.
The regional phone companies said they will not seek rate increases until the end of the year. Critics say the delay is designed to shield the Bush administration from criticism before the presidential election.
Legal sources and industry experts said it is unlikely that the request for a stay will be approved. The groups filing the request acknowledged yesterday that they face an uphill battle after both the Justice Department and the FCC declined to appeal.
"Clearly we would have had a better chance if the FCC was filing with us, but this is not a frivolous filing and we think we are entitled to a stay," said H. Russell Frisby, chief executive of CompTel/Ascent, a trade group representing long-distance companies, including AT&T.
Regional phone companies said yesterday that they would oppose the stay in reply comments to be filed with the Supreme Court on Monday. "We agree with the solicitor general that this is not a case for the Supreme Court, and in addition we believe there is no basis for a stay," said Bill McCloskey, a spokesman for BellSouth Corp.
Even if the Supreme Court denies the request for a stay the groups are likely to proceed with their appeal of the Court of Appeals decision. However, the Supreme Court is not expected to decide until the fall whether it will hear the case. Even if the court takes the case, a final ruling could be more than a year away.
In their brief to the Supreme Court, AT&T, MCI and their fellow plaintiffs argued that the appeals court decision not only "jeopardizes competitive services now being received by approximately 20 million residential and business customers, but it also threatens to work fundamental changes in markets for both local telephone and long distance services."