The Supreme Court said Wednesday that the nation’s regional Bell telephone companies can immediately start offering electronic information services, a ruling that marks a major setback to newspapers and other information providers.
The high court refused to keep the seven telephone companies out of the data services business while opponents appeal a lower court ruling that opened the door to the “Baby Bells.”
A group that includes consumer groups, newspapers, broadcasters, cable television companies and computer-services industries is seeking to overturn a decision by a federal appeals court last month.
The regional Bell companies had been barred from the fast-growing and lucrative information services business since their formation in 1984 after the breakup of American Telephone & Telegraph Co.
But federal Judge Harold Greene, saying he was acting reluctantly, ruled in July that regional telephone firms could offer customers information as well as the lines over which the data was delivered. He delayed the effect of his ruling, but the federal appeals court said that delay was “an abuse of discretion.” The Supreme Court, without comment, upheld that position.
Opponents of the phone companies’ involvement worry that once the Baby Bells begin providing information services, the courts will be reluctant to pull the plug.
The ruling means that the Bell firms can immediately offer such services as advertising, stock quotes, sports scores, news reports and electronic yellow pages.
One such service being examined by some companies would offer telephone customers the chance to deliver messages onto a computer system or facsimile machine.
The opponents of their involvement in electronic publishing argue that competition will be eliminated and that just a few firms will end up dominating the market.
Now that the Supreme Court has ruled, congressional action is the only practical way to keep the telephone firms out of the business, said Cathleen Black, president of the American Newspaper Publishers Assn.
The regional phone firms are Ameritech Corp., Bell Atlantic Corp., BellSouth Corp., NYNEX Corp., Pacific Telesis Group, Southwestern Bell Corp. and US West Inc.