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04:54 PM

Supreme Court To Hear AT&T Access Fee Appeal

A federal appeals court had ruled that AT&T was charging wholesale prices to ISPs that were too high for them to compete with AT&T in the retail market.

The U.S. Supreme Court has decided to hear an antitrust case involving AT&T and Internet service providers, which are protesting that AT&T's access fees are too high.

AT&T and the Bush Administration had urged the high court to review the case.

The Ninth Circuit Court of Appeals in San Francisco had ruled against AT&T and agreed that the company's wholesale prices to the ISPs were too high for them to compete with AT&T in the retail market.

The plaintiff in the case is LinkLine Communications, which bought high-speed service from AT&T. The ISP combined the service with other services and sold the package in competition with AT&T.

Fights over access fees have dogged the U.S. telecommunications industry ever since the old AT&T was broken up more than two decades ago. One of the offshoots was SBC Communications, which then acquired what was left of the old AT&T, then a long distance company. SBC then took over the AT&T name and along the way acquired BellSouth, which had been challenging AT&T over access fee issues, too.

The access fee issue has continued to boil under the radar until last year when the Appeals Court allowed the lawsuit filed by LinkLine to move forward in federal court. The original suit had been filed against Pacific Bell -- later acquired by SBC/AT&T.

The Bush Administration's Office of U.S. Solicitor General sided with AT&T, maintaining that federal antitrust laws don't cover the LinkLine claims.

In urging the Supreme Court to overturn the Ninth Circuit opinion, U.S. Solicitor General Paul Clement said: "Such a theory of liability could not be reconciled with this cout's modern antitrust jurisprudence."

The case is Pacific Bell Telephone Co. v. Linkline Communications Inc., 07-512.

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