Court Rejects Bells Plea for Long Distance

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Cable operators scored a victory last week when the Supreme
Court rejected an appeal by three regional Bell operating companies with designs on the
$100 billion long-distance market.

Without comment, the court let stand a lower-court ruling
upholding the provision in the Telecommunications Act of 1996 that requires the RBOCs to
open their markets to competition before being allowed into the lucrative long-distance
business.

To date, the Federal Communications Commission has rejected
every long-distance application filed by the telcos, finding that none has sufficiently
opened up the local loop.

Now, however, cable-industry officials believe that
local-exchange carriers must engage in "meaningful" interconnection talks with
operators in order to comply with the 14-point checklist contained in the 1996 Act.
Otherwise, they risk being shut out of long distance.

"If the court had said no, [the telcos] might have
been about to get around the checklist," said Daniel Brenner, vice president of legal
and regulatory affairs for the National Cable Television Association. "This means
that operators are going to be able to interconnect on a more effective basis with the
incumbent RBOC."

Three RBOCs -- SBC Communications Inc., U S West and Bell
Atlantic Corp. -- had argued that the checklist violated the "Bill of Attainder"
clause in the Constitution, an obscure provision that prohibits lawmakers from enacting
legislation that only punishes specific individuals or entities.

Officials at AT&T Corp., which is in the process of
acquiring Tele-Communications Inc., called the argument "a cynical effort" to
circumvent a law that the telcos originally supported.

"The Supreme Court's action sends a signal that
rather than filing lawsuits to undercut the act, the Bells ought to get on with the
business of opening their markets to competition," said AT&T general counsel Jim
Cicconi, in a prepared statement.

Cablevision Systems Corp. -- an MSO that currently offers
facilities-based residential-telephone service on Long Island, N.Y. -- agreed that the
decision was a victory for operators.

"Anything that opens up the markets is a
positive," spokeswoman Kate Murphy said.

U S West spokesman David Beigie said the telco will
continue working to convince the FCC of its efforts to promote competition.

"The long-distance companies have found all kinds of
clever ways of keeping the LECs at bay," Beigie said. "Meanwhile, they go after
lucrative business customers, while claiming that it's too difficult to get into the
residential arena."

In a prepared statement, Bell Atlantic said it planned to
push ahead with a first-quarter filing to provide long-distance service in New York.

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