Supreme Court Opens Up Local Phone Lines

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Here's the good news for anyone holding stock in long-distance phone companies such as AT&T and World Com: The Supreme Court has upheld a key nugget of the 1996 Telecommunications Act that should make it easier for the long-distance guys to begin offering local phone service. The bad news, as usual, is for those of us looking for cheaper phone service: It's still going to be years before we can choose from a menu of local phone companies.

In the world envisioned by the labyrinthine Telecommunications Act, the local Bells were supposed to give access on their networks to any company willing to pay a small fee. But who gets to decide what that fee is? The act charged the Federal Communications Commission with the authority -- prompting the Bells, along with state utility companies, to file suit, arguing that they were in the best position to set local access rates. On Monday, the court sided with the feds, albeit reluctantly: Judge Scalia called the act "a model of ambiguity" in his opinion, but said that Congress intended the FCC to take care of those problems. But now that the feds are free to set rates, local carriers are free to challenge them--and since nobody wants to give up a pure monopoly, the Bells are expected to appeal every step of the way. By the time the matter's hashed out, most people will doubtless be using their PCs to make local calls.