THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: SATURDAY, June 18, 1994 TAG: 9406180233
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY LAURIE ASSEO, ASSOCIATED PRESS
DATELINE: 940618 LENGTH: WASHINGTON
By a 5-3 vote, the court struck down a Federal Communications Commission policy that allowed MCI and other long-distance companies - but not AT&T - to offer rates and services not specified in filings with the commission.
{REST} The policy was designed to foster more competition for AT&T, which holds a 60 percent share of the nation's long-distance market. AT&T had successfully challenged the policy in the U.S. Circuit Court of Appeals for the District of Columbia.
Agreeing with that court, the justices said federal communications law generally does not authorize the FCC to let smaller long-distance telephone companies cut such special deals with customers.
Federal law allows the commission to ``modify any requirement'' of the law.
But Justice Antonin Scalia wrote for the court, ``We think an elimination of the crucial provision of the statute for 40 percent of a major sector of the industry is much too extensive to be considered a `modification.' ''
Scalia said the court has ``considerable sympathy'' for arguments by smaller long-distance companies that the costs of filing tariffs with the FCC can be prohibitive and that filing tariff rates can stifle price competition.
The commission does have some limited authority to change filing requirements or even waive them altogether, Scalia said.
``But what we have here goes well beyond that,'' he added. ``It is effectively the introduction of a whole new regime of regulation ... which may well be a better regime but is not the one that Congress established.''
Scalia's opinion was joined by Chief Justice William H. Rehnquist and Justices Anthony M. Kennedy, Clarence Thomas and Ruth Bader Ginsburg.
The commission policy has been in place for more than 10 years, and is credited by some with fostering greater competition and innovation in interstate telecommunications.
But AT&T denies that changes in the long-distance marketplace are attributable to the commission's policy on filing tariffs.
Justice John Paul Stevens wrote in dissent that Friday's decision adopts a ``rigid literalism that deprives the FCC of the flexibility Congress meant it to have in order to implement the core policies of the act in rapidly changing conditions.'' His opinion was joined by Justices Harry A. Blackmun and David H. Souter.
Justice Sandra Day O'Connor did not participate in the case.
{KEYWORDS} U.S. SUPREME COURT RULING by CNB