Fcc Defends Proposed Rules That Would Open Local Phone Markets To Competition

The government is defending now-suspended federal rules designed to open up the $100 billion local phone market to competition.

In a brief filed Monday with a federal appeals court, the Federal Communications Commission said it was well within its statutory authority to give states pricing guidelines for either reselling local phone service or leasing pieces of local phone networks.

Both methods allow local phone rivals to provide service on their own in direct competition to Bell companies and other established carriers.

Congress directed the FCC in a telecommunications law to write detailed rules to bring about local phone competition, which in theory should lower consumer prices and create more telecommunications choices.

“Congress thus not only gave the FCC authority to establish pricing rules relating to those matters, Congress required the commission to issue such rules,” the FCC said in its brief filed with the court in St. Louis.

The telecommunications law, enacted Feb. 8, allowed local, long-distance and cable companies for the first time to enter each others’ businesses.

The FCC adopted a broad set of rules in August. Pricing aspects of the rules were challenged in federal court by state regulators and local phone companies.

As a result, last summer the 8th U.S. Circuit Court of Appeals suspended the rules, pending a ruling on the merits of the case. Arguments are scheduled for Jan. 17.