U.S. SUPREME COURT ACCEPTS VERIZON APPEAL OF TRINKO RULING

The case, which had been decided by the 2nd U.S. Appeals Court, N.Y., involved a complaint by the Trinko firm, acting as a consumer, that Verizon’s denial of access to competitors, in this case AT&T, harmed it and other consumers. The case conflicts with the landmark Goldwasser v. Ameritech decision in the 7th U.S. Appeals Court, Chicago, which ruled in favor of the Bells’ argument that Telecom Act issues weren’t subject to antitrust action. Federal district courts have tended to follow the Goldwasser ruling and dismiss such antitrust cases, although a few have departed from that pattern. Oral argument won’t be heard in the case until next term, which begins in Oct.

Verizon is “delighted” because the court now will have a “chance to clear up the conflict in the lower courts,” Senior Vp John Thorne said. He said the court also would have an opportunity to determine “what affirmative assistance” Bell companies must give rivals under the Telecom Act. Thorne said companies in other businesses had been watching the Trinko case with interest because of the questions it raised about the obligations of dominant providers. For example, he said, the Trinko case has arisen in pending court suits, including a Cablevision dispute with the N.Y. Yankees and a United Parcel Service case involving access to rival insurance companies. Under antitrust laws, companies such as the Bells weren’t obligated to make parts of their businesses available to competitors, Thorne said. The Telecom Act initiated that mandate but put the FCC, not the courts, in charge of overseeing it, he said.

BellSouth said in a statement that it also thinks the 2nd Circuit’s decision should be overturned because it created a conflict between antitrust law and the Telecom Act. BellSouth lost a similar case in the 11th U.S. Appeals Court, Atlanta, last year that had been brought by Covad. Asked if the company would seek Supreme Court review of that decision, a BellSouth spokesman said no decision had been made. The Supreme Court “should clarify that congressionally designated regulators, not juries, should resolve these complex disputes,” BellSouth said. USTA Vp Lawrence Sarjeant said if this conflict were left uncorrected, it “could produce significant negative consequences for the telecommunications industry.” Dan Berninger of Pulver.com, which provides research for CLECs filing antitrust claims, said much would hinge on whether the Supreme Court “believes Verizon’s representation of the world, that’s everything’s working fine now.” He said he doubted the court would support Verizon because the Telecom Act could be read to say antitrust laws applied to competitive access disputes.

Investment firm Legg Mason said it wouldn’t be wise to read too much into the Supreme Court’s decision to take the case since it limited its review to the one question of whether the 2nd Circuit erred. Legg Mason said it was understandable that the Bells would like a court ruling that would eliminate the growing number of antitrust suits being filed in disputes over their obligations under the Telecom Act. However, it also is possible the justices simply would “resolve the differences between circuits and will allow the lawsuits to move ahead,” Legg Mason cautioned.

The high court was silent on another important appeal that has been pending before it -- WorldCom’s appeal of the U.S. Appeals Court, D.C., ruling in May 2002 remanding the FCC’s UNE and line-sharing rules. That remand played a key role in the FCC’s recent UNE decision. The court could reveal a decision on that one later this month.