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Verizon, Qwest Ask Court to Void FCC's Rate Freeze

August 25, 2004|From Bloomberg News

Verizon Communications Inc. and Qwest Communications International Inc. have asked a federal court to overturn the U.S. government's decision to freeze prices paid by competitors to use local telephone networks.

The Federal Communications Commission last week ordered companies including Verizon, Qwest, SBC Communications Inc. and BellSouth Corp. to maintain for six months discounted rental rates given to AT&T Corp., MCI Inc. and other telephone companies. The regulations requiring the discounts expired in June after a U.S. federal appeals court ruled them illegal.

The FCC acted unlawfully by keeping in place a set of rules that a court had struck down, said Verizon and Qwest, two of the four largest U.S. local phone carriers. A victory in court could give the Baby Bell phone companies more influence in determining when and how quickly line-use rates rise.

The companies and the U.S. Telecom Assn., a group representing local carriers, filed the appeal late Monday with the same federal appeals court in Washington that rejected the rules in March, Verizon spokesman Peter Thonis said.

The expired rules, designed to foster competition in the $127-billion local-calling market, required the Bells to sell network access at below-market rates set by regulators. AT&T, the biggest U.S. long-distance operator, provides local calling by renting lines and then reselling the service.

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