The U.S. Supreme Court said Monday that it would decide whether consumers and rival telephone companies could be barred from filing private antitrust cases against dominant local carriers such as Verizon Communications Inc. for failing to open their markets enough to competition.
The high court agreed to hear an appeal by Verizon, the biggest U.S. local telephone carrier, in a case that could open the company to lawsuits by consumers and rivals that claim problems in obtaining access to its network.
Backing Verizon's effort to ban the lawsuits are SBC Communications Inc., California's dominant local phone service provider, five other companies and the Bush administration. They said a U.S. 2nd Circuit Court of Appeals decision allowing the suits usurps regulators' power and unfairly subjects dominant firms to antitrust suits and possible triple damages.
Last June's 2nd Circuit decision spawned 25 consumer suits. Rivals filed five antitrust lawsuits against the three largest regional phone companies: Verizon, SBC and BellSouth Corp.
The case before the Supreme Court arose from a suit filed by New York lawyer Curtis V. Trinko against Bell Atlantic, which later merged with GTE Corp. to form Verizon, arguing that it had suffered damage because of Bell Atlantic's failure to provide satisfactory wholesale prices to its provider, AT&T; Corp.
The 1996 Telecommunications Act requires Verizon and other regional Bell companies to make their networks available to rivals to give consumers a choice of providers. In exchange, the carriers, which control 90% of the nation's local service, would gain access to the lucrative long-distance voice and data markets.
The federal appeals court ruled last June that a consumer could sue Verizon for triple damages under the antitrust laws for service delays, reversing a lower court's dismissal of the case. The high court said it would address whether the appeals court erred by reinstating the antitrust claim. The case will be argued and decided in the Supreme Court term that begins October.
The battle over access to local telephone networks has heated up in recent months as AT&T; and WorldCom Inc. have expanded their push into local markets. They have complained about slow processing of orders and poor service by local carriers, arguing that the law prohibits unreasonable discrimination.