US punters face higher phone charges

Consumers and businesses in the US have been warned that they could face higher phone charges in the future after the Solicitor General said he would not seek to challenge a recent ruling by the Appeals Court.

In August last year the Federal Communication Commission FCC ruled that the four major regional phone companies - BellSouth, Qwest, SBC and Verizon - must give their competitors access to their networks at discounted prices in its 2003 Triennial Review Order (TRO).

But the Bells, as they're known, got the hump arguing that the rules made no competitive sense (well, not for them at least) and in March, a US Court of Appeals agreed with them throwing out the FCC's new rules. Yesterday, hopes that the decision might be overturned were dashed as the US Solicitor General decided not to appeal the decision.

Now, world+dog are lining up to let everyone know exactly what they think of the latest twist to hit the US telecoms industry. In essence, those backing the Solicitor General's decision claim that the absence of regulatory intervention will give the industry stability and aid investment.

Those against say millions of punters must now brace themselves for higher phone charges.

Peter Arnold, spokesman for Voices For Choices, a coalition of associations and companies that supports fair competition in local telephone service and high-speed Internet access, said: "One result of today's decision is already clear. Higher phone prices are going to hit like a rock.

"The Appeals Court ripped away one of the most important consumer protections in federal telecom law. The only reason calling prices dropped in recent years is because competition emerged to the Bell monopolies.

"Now the Administration has flipped positions and in effect allowed the Bells to block these emerging choices not only in a few states, but nationwide. The higher prices will impact more than just the 19 million Americans who have switched local phone providers - they'll impact all ratepayers.

"With today's decision by the Solicitor General, you'll likely see a return to the Bells' typical pattern of constant price hikes."

Chicago-based communications outfit Access One had this to say: " We feel the Solicitor General's decision is wrong, since it is contrary to the law and the public interest. For these reasons, it only makes sense that the Supreme Court have the last word in this contentious debate.

"Bell monopolies state this is a victory for consumers when in fact nothing could be further from the truth. How can you trust the companies who have willingly paid more than $2 billion in fines over the last eight years solely in an effort to keep others out of their markets?"

But there are still plenty around to defend the decision. The Telecommunications Research & Action Center (TRAC), which claims to promotes the interests of residential phone punters, said: "In this high stakes negotiations it is time to move from the court room to the negotiating table. Further litigation would not serve the interest of consumers.

"The potential of more litigation would have created a wait and see attitude. Now all parties should be willing to sit down and conclude negotiations that will assure reasonable rates AND incentives to invest in deployment of new fibre networks to all people."

While the Institute for Policy Innovation (IPI) Commission said it applauded the Bush Administration for "resisting the call for continued regulation, and for taking this very important step toward a working telecom market". ®

Related stories

FCC attempts telco compromise
Court backs telcos in US network wars
US groups lobby over VoIP regulation