SBC Rivals Win Ruling Blocking Illinois Law

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Bloomberg News

Competitors of SBC Communications Inc. on Monday won a judge’s decision blocking a new Illinois law that would have allowed the company to raise prices for network access.

AT&T; Corp. and MCI, a subsidiary of WorldCom Inc., claimed in a lawsuit that the special-interest legislation hurts consumers.

They asked U.S. District Judge Charles Kocoras in Chicago to temporarily block the law from taking effect while their lawsuit proceeds.


SBC’s “direct appeal to the Illinois legislature for rate relief is expressly contrary to federal law,” Kocoras wrote in his decision. More than 600,000 Illinois customers buy local telephone services from competitors that use SBC lines, AT&T; said.

“The legislation is anti-competitive,” Kocoras wrote. “Less competition means less choices for consumers, and less choices for consumers ultimately leads to higher prices.”

SBC is California’s dominant local phone company and the second-largest in the country.

The fight over the Illinois fees matters because SBC bridles against similar rules in California, which are intended to foster competition by allowing rivals such as AT&T; to rent the gear required to offer local phone service at regulated rates.

Earlier Monday, Illinois regulators approved an order allowing SBC to increase charges to competitors for using its Illinois lines to about $19.16 a line from $12.38, SBC Illinois President Carrie Hightman said in an interview before the decision.

A spokeswoman for San Antonio-based SBC didn’t immediately have a comment on the ruling.

On the New York Stock Exchange, SBC shares fell 62 cents to $25.80, and AT&T; declined 9 cents to $19.28.