Bell Resale Rules Upheld


A U.S. Supreme Court ruling last week that required Baby Bell phone companies to lease equipment to competitors at a discounted price is unlikely to have a major impact on cable operators, industry officials say.

Verizon Communications and other regional phone companies had challenged the legitimacy of rates set by the Federal Communications Commission for access to local phone networks, which Verizon and other phone companies had complained were too low.

In a 5-3 ruling handed down May 13, the Supreme Court disagreed. The majority found the FCC's current pricing scheme acceptable under the 1996 Telecommunications Act — designed to promote competition between local phone companies.

The decision is likely to be a boon for local phone companies that want cheap access to the Baby Bell's phone networks.

The effect on cable operators is expected to be minimal because they do not provide services over telephone lines.

"We wouldn't have any reason to access the local Bells," Time Warner Cable spokesman Mark Harrad said.

Indirectly, the decision could give a marginal competitive edge to cable companies that offer voice services in addition to data and television packages.

Under the pricing scheme upheld by the court, the Baby Bells say they have no incentive to upgrade their networks because their competitors can access them at such low costs.

"It would have hurt the cable companies had the Court gone the other way. Now maybe it'll help the cable companies," said Verizon spokesman Bob Bishop. "It allows them to bring innovations to their networks when in fact it inhibits innovation to our networks."

States News Service