SBC Lawsuit Challenges Telecom Act

SBC Communications Inc., which has been aggressively challenging regulators to let it offer long-distance service, filed suit Wednesday to strike down part of the landmark Telecommunications Act of 1996, saying the law is biased against regional Bell telephone companies.

In a 21-page complaint filed in U.S. District Court in Wichita Falls, Texas, SBC challenges the act’s “special provisions concerning Bell operating companies” on the grounds they violate the constitutional separation of powers and the equal protection clause of the 5th Amendment, among other protections.

The lawsuit centers on special provisions that require the so-called Baby Bells to provide rivals with access to the local phone network under “reasonable and nondiscriminatory” terms and resell local service at “wholesale rates.”

It is the latest legal dispute to arise from a telecommunications law that has been sharply criticized for failing to stimulate competition or improve phone service and prices since it was enacted 17 months ago.

The SBC lawsuit follows the Federal Communications Commission’s rejection of SBC’s application to provide long-distance service in Oklahoma and comes less than a week after merger talks between SBC and AT&T; Corp. broke off amid highly publicized opposition from FCC Chairman Reed Hundt.

SBC shares rose 6.25 cents to close at $60.94 on the New York Stock Exchange.