Court Upholds Verizon’s N.Y. Long-Distance Bid
A U.S. appeals court Tuesday upheld a decision by federal regulators to allow the former Bell Atlantic to become the first regional telephone company to offer long-distance service in a state where it provides local service.
The unanimous three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected a challenge by AT&T; Corp., the No. 1 U.S. long-distance carrier, to the FCC’s decision to give long-distance permission in New York to Bell Atlantic, now called Verizon Communications since its recent merger with GTE.
Last year’s Federal Communications Commission decision marked the first time since the 1984 breakup of AT&T; that a regional Bell was allowed to offer long distance after passing a 1996 Telecommunications Act checklist requiring evidence of local competition.
But just hours after the ruling, the FCC said Verizon’s newly acquired GTE unit has agreed to pay $2.7 million to settle charges it failed to allow competitors to install equipment in their central offices quickly without the construction of walls or cages.
In the long-distance battle, AT&T; had objected to Bell Atlantic’s pricing of certain network services and disputed whether the regional company offered nondiscriminatory access to some circuits.
Key to the court’s ruling is that it found no defect in the FCC’s analysis.
“Given the evidence of growing competition in the New York local telephone market . . . we find no basis for faulting the commission’s conclusion that Bell Atlantic satisfied the statute’s requirements for entry into the long-distance telephone market,” Judge David Tatel said in the opinion.
There was no immediate comment from either the FCC or AT&T.;
AT&T; has asked the same court to review the FCC’s approval in June of SBC Communications Inc.’s application to sell long-distance service in Texas.
SBC recently filed with state regulators in Nevada and Arkansas to offer long-distance service in those states, the first step in the regulatory process to trying to prove competition is flourishing in those markets and winning approval.
Verizon expects to file its long-distance applications by the end of the third quarter or the beginning of the fourth quarter in Massachusetts and New Jersey.
Shares of Verizon rose $1.19 to close at $47.94 and AT&T; rose 88 cents to close at $31.81, both on the New York Stock Exchange.
As for the settlement agreement with the government, the FCC probe centered on complaints from other phone companies that GTE had refused to allow competitors to place equipment in its central offices.
