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Justice appeals phone ruling
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January 7, 1998: 2:54 p.m. ET
Government says decision poses direct threat to telecom reform
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NEW YORK (CNNfn) - The Justice Department Wednesday appealed a federal judge's ruling declaring as unconstitutional provisions of a landmark federal law that restricts the regional Baby Bells from entering the $80 billion long-distance telephone market.
On Dec. 31, U.S. District Judge Joe Kendall agreed with regional phone company SBC Communications of San Antonio that portions of the Telecommunications Act of 1996 discriminated against SBC and other Baby Bells.
In its appeal, Justice argues that the act goes to great lengths to bring about local phone competition and to allow the Baby Bells to provide long-distance and other services once they open their markets up to other players
The government says Kendall's ruling brings up several legal questions that should be resolved quickly.
Justice Dept. officials are asking for a stay of Kendall's decision while the matter is on appeal.
"The Court should recognize that the extraordinary nature of its decision to invalidate an important piece of economic legislation underscores the necessity of preserving the status quo during appellate review," government attorneys wrote.
Justice also shot back at the telecommunications companies, saying that they previously supported the act and chose to wait more than a year after it became law to mount a legal challenge.
"Put simply, the Court's decision threatens to derail a major enactment of Congress that was formulated after years of hearings and debate," Justice wrote.
The government said a stay of Kendall's decision is necessary in order to give appellate courts time to review the facts while ensuring no action is taken that could later be viewed as contrary to the act's original intent.
The Telecommunications Act of 1996 barred the Bells from offering long-distance until they opened their own local phone monopolies to long-distance carriers such as AT&T Corp., MCI Communications Corp. and others seeking to offer rival phone service.
--from staff writer Cyrus Afzali
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