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Bells ask courts to block pricing rules

The nation's biggest local phone companies ask a federal court to block FCC rules designed to speed competition.

The nation's biggest local phone companies have asked a federal court to block pricing rules designed to speed competition in the local phone markets.

The move marks the first round of legal skirmishing following a January Supreme Court decision that upheld the Federal Communications Commission's right to make national pricing rules affecting local phone companies.

If the court grants the companies' request, businesses and consumers will be less likely to see any changes in their local phone bills until the lengthy court battle is settled. If the new federal rules are implemented, however, some alternative phone companies may be able to offer lower local phone rates.

The dispute goes back several years, stemming from federal rules passed in the wake of the 1996 Telecommunications Act that govern how GTE and the Baby Bell companies are required to lease their network at wholesale prices to potential competitors.

The phone companies challenged these rules, saying that the FCC was infringing on state regulators' responsibilities.

The Baby Bells have consistently fought the FCC over the terms of the act, which was intended to open up local phone monopolies to competition from start-ups and long distance companies like AT&T.

Some competition has developed in business markets, but residential customers still have few new options for local service.

The Eighth Circuit federal court already blocked the FCC decision once, agreeing that federal regulators had no power to make state-level pricing decisions. In a counter move, the Supreme Court upheld the FCC's power to make the rules--but sent the case back to the lower courts to examine the details of the rules themselves.

Now the Baby Bells and GTE have gone back to court, challenging the substance of the FCC's pricing rules, which they say don't take into account the costs of building local networks.

In their new filing, the companies asked that the court continue blocking the FCC's original rules until the new challenge has been completed.

"That will avoid confusion in the marketplace," said Bob Bishop, a GTE spokesman.

If the original federal rules are allowed to go forward now, agreements between competing phone companies will have to be renegotiated, he said. Further changes in the market's rules could happen as a result of the court decision, he added.

"The idea here is to avoid that flip-flop," Bishop said.