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Supreme Court Next Stop For Telecom Access-Fee Issue

The telecommunications industry's hottest topic--access fees--is likely headed for the U.S. Supreme Court, in the wake of a denial by a Federal Appeals Court to permit existing regulations for the fees to remain in force.

Although the decision last Friday by the U.S. Court of Appeals for the District of Columbia had been expected, the litigation's path to the Supreme Court had been held up while the appeals body reviewed its earlier decision. The decision gives the four former regional Bell operating companies--BellSouth, Qwest, SBC, and Verizon--the go-ahead to raise the fees they charge to long-distance providers, such as AT&T and MCI, to connect to their local telephone line monopolies.

AT&T and the National Association of Regulatory Utility Commissioners (NARUC) have said they plan to take the issue to the Supreme Court. NARUC represents state regulatory agencies, many of which currently regulate access fees. Most consumer groups have said consumers' telephone bills will rise if the Bell monopolies are permitted to raise access fees. The issue is highly charged politically, because the administration wants to avoid across-the-board increases in telephone service before the November election.

The entire issue is exacerbated by the expected gradual erosion of traditional landline telephone service, as cell-phone service improves and VoIP service begins to take hold.

A spotlight now shines on solicitor general Theodore Olson and whether he-and, by extension, the Administration--will appeal the decision, too. The deadline for appealing is June 30.