Court Upholds Ruling Against Baby Bells

A federal appeals court in Washington agreed that a 1996 law barred regional Bell companies such as Chicago-based Ameritech Corp. and Denver-based US West from selling long-distance service from Qwest Communications International Inc., also based in Denver. The ruling, upholding a decision by the Federal Communications Commission, was a victory for AT&T; Corp. and other carriers who argued that marketing agreements Qwest made with Ameritech and US West last year were illegal, because the Baby Bells are barred from providing long-distance service. Under the 1996 Telecommunications Act, the Bell companies may not jump into the $90-billion long-distance telephone market until they prove they have opened their own networks to competitors in the $110-billion local telephone market. Shares of Qwest fell $1.75 to close at $43.31 on Nasdaq. On the New York Stock Exchange, shares of US West fell 38 cents to close at $53.50 and shares of Ameritech rose $1.06 to close at $69.69.