BellSouth, US West Lose in Telecom Act Appeal

BellSouth Corp. and US West Inc. on Monday lost a Supreme Court appeal that could have jump-started legal efforts by regional phone companies to enter the $80-billion long-distance business.

The high court refused to review contentions by the two companies that the 1996 telecommunications overhaul unconstitutionally limited their involvement in the electronic-publishing business. The justices left intact a lower court decision upholding the rules.

Although the case did not directly involve separate restrictions on long-distance offerings by the five Bell companies, the legal issues were almost identical to those raised in challenges to the long-distance rules. A high-court decision favoring the Bells could have cast serious doubt on those rules.

The 1996 law bars Baby Bells from entering the long-distance business until they can prove they allow competition in the local markets they now dominate. So far none of the Bells has met that standard. The law also prevents the Bells’ entering the information services business, except through a separate affiliate, until February. BellSouth and US West argued that those rules violate a constitutional clause that bars Congress from singling out individuals for punishment. The two Bells also said the law infringed their free-speech rights.

The high court appeal was something of a long shot. All three federal appeals court panels to consider the issue rejected the Bells’ claims.