FCC to Seek Delay in Phone Case, Sources Say

In an unusual display of unanimity, the Federal Communications Commission is expected today to seek a 45-day delay in a court case over telephone competition rules to give Baby Bells and their rivals more time to negotiate wholesale pricing agreements, two industry sources in Washington said.

The five commissioners have been bitterly divided over the rules but are expected to ask the Justice Department to request more time from the District of Columbia U.S. Circuit Court of Appeals, the sources said.

The appeals court threw out the rules and gave the FCC 60 days to rewrite the rules or appeal to the Supreme Court.

Bell rivals have complained that they have negotiated many times and gotten nowhere since the adoption of the Telecommunications Act of 1996, which was enacted to open local phone markets to competitors.

“We applaud any move that would encourage telecom companies to negotiate agreements among themselves,” said John Britton, spokesman for SBC Communications Inc., the dominant local phone company in California and 12 other states.

SBC had sent notices to competitors in California after the March 2 court opinion saying they must negotiate new wholesale prices in the next few months.

Rivals, which include AT&T; Corp. and WorldCom Inc.’s MCI unit, also applauded the FCC’s expected action.

“From the competitive viewpoint, this is positive because it will call the bluff of the Bells, who say they want to negotiate fair and reasonable rates that will allow the competitive industry to survive,” said one of the sources, who asked not to be identified.

Rivals have complained that the Bells’ ideas of fair wholesale rates have been at levels that exceed retail prices.

The debate over the rules, as well as over the issue of whether to appeal the circuit court’s decision to the Supreme Court, has been heated. U.S. senators and representatives, including leaders of influential committees, have written to the White House and the Justice Department.

Although some leaders have sided with the Bells, most have urged an appeal of the case.