WASHINGTON - A federal court today upheld the government's rejection of a plan by SBC Communications Inc. to offer long-distance service in Oklahoma, dealing a setback to regional Bell companies trying to expand into long distance.
The Federal Communications Commission last June rejected SBC's Oklahoma application, finding that the company had not met its obligation under the 1996 Telecommunications Act to open its local network to competitors.
The US District Court for the District of Columbia, which issued today's ruling, is also reviewing a broader appeal from BellSouth Corp. over the FCC's rejection of a long-distance application for South Carolina.
So far, the FCC has rejected all four regional Bell company attempts to enter the long-distance business. In addition to the Oklahoma and South Carolina cases, the FCC rejected Ameritech Corp. in Michigan and BellSouth in Louisiana.
In recent months, however, the FCC has initiated a more collaborative process to help the Bell companies understand its interpretation of the Telecom Act's requirements.
Since the FCC rejections, SBC has continued applying for permission to offer long distance by working with regulators in Texas, Arkansas, and Kansas and renewing its Oklahoma application. Bell Atlantic Corp. is working with regulators in New York on a long-distance application in that state.
SBC said in a statement its Oklahoma applications should have been approved under the FCC's prior system, but praised the new FCC approach.
"The FCC has changed dramatically and demonstrated a more collaborative approach," the company said. "We remain hopeful that we will provide our customers with the full benefits of competition in local and long-distance service this year."
FCC Chairman William Kennard said he was pleased with the decision.
"When the Bell companies open their local markets to competitors and can in turn provide long-distance service, consumers will benefit from increased competition and choice in both the local and long-distance marketplace," he said in a statement.
Long-distance companies that have criticized the Bells for not opening their local markets also praised the decision.
"Now that the Bells know that the law cannot be evaded, it's time that they implement it as Congress intended," said Jonathan Sallet, chief policy counsel at MCI Communications Corp.
