Feeds

Supremes ankle AT&T DSL line-sharing suit

Reject antitrust pleas for lower pricing

Eight steps to building an HP BladeSystem

On AT&T's high-speed internet pipes, it's AT&T's ballgame, the US Supreme Court has ruled.

AT&T logo

The top court on Wednesday unanimously rejected accusations that AT&T's Pacific Bell Telephone unit was engaged in an illegal "price squeeze" designed to drive away smaller DSL internet providers using the carrier's infrastructure.

The justices ruled that AT&T isn't obligated to sell wholesale DSL service to potential competitors, and therefore can charge whatever it wants for use of its pipes.

At issue is the "common carrier" responsibilities required by dominant internet service providers. By law, Pacific Bell is required to indiscriminately sell wholesale access to its telephone network to unaffiliated providers. But in 2005, the Federal Communications Commission eliminated common carrier responsibilities for high-speed internet companies.

In 2003, PacBell was sued by a group of ISPs, lead by Linkline Communications, who claimed the telecom is abusing monopoly rights by offering wholesale prices that are out of line with its retail internet offerings. They accused the telecom giant of setting the wholesale price for DSL transport high and the retail price low to "exclude and unreasonably impede competition," thus allowing it to "preserve and maintain its monopoly control of DSL access to the internet."

The top court ruled that AT&T's pricing regime isn't a violation of the US's Sherman Antitrust Act:

"If AT&T had simply stopped providing DSL transport service to the plaintiff, it would not have run afoul of the Sherman Act," the decision stated. "Under these circumstances, AT&T was not required to offer this service at the wholesale prices the plaintiffs would have preferred."

The court also tossed out the price-squeezing complaint, calling the charges "nothing more than an amalgamation of meritless claims." AT&T can sell its retail DSL service at a low price so long as it's not engaged in predatory pricing, the justices ruled, and the wholesale price ain't nobody's business but AT&T's.

"If there is no duty to deal at the wholesale level and no predatory pricing at the retail level, then the firm is certainly not required to price both of these services in a manner that preserves its rivals' profit margins," the court stated.

The Supreme Court decision overturns a US appeals court in San Francisco that ruled AT&T is setting its wholesale prices too high for smaller ISPs to compete.

But the top court says the ISPs need to go back to the drawing board for their arguments if they want to take the case back to the lower courts.

"For if AT&T can bankrupt the plaintiffs by refusing to deal altogether, the plaintiffs must demonstrate why the law prevents AT&T from putting them out of business by pricing them out of the market."

A copy of the opinion, penned by Chief Justice John Roberts, is available here (PDF). ®

Bridging the IT gap between rising business demands and ageing tools

More from The Register

next story
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.