FCC Says SBC Rivals Free to Seek Damages

The Federal Communications Commission partially upheld a complaint by two rivals of SBC Communications Inc. that alleged the telephone giant violated a 1999 merger agreement by refusing to share parts of its phone network with them.

The finding frees the two upstarts that brought the complaint -- Core Communications Inc. and Z-Tel Communications Inc. -- to seek financial damages against SBC, which was fined $6 million by the FCC in October over the same allegations.

The agency found that SBC violated the merger agreement in five of the 13 states in which the company provides phone service.

SBC, which said it is considering its options, had contested the FCC’s action on the grounds that the matter should be resolved by state utility commissions.