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Baby Bells to have day in high court
Qwest, other telcos want antitrust case dismissed
By Jeff Smith
Rocky Mountain News
Tuesday, June 27, 2006

The U.S. Supreme Court has agreed to hear regional Baby Bells, including Qwest Communications, argue that an antitrust case against them should be thrown out.  At issue are allegations that Verizon, Qwest, BellSouth and AT&T, which recently merged with SBC Communications, conspired to keep other phone companies from competing successfully in their territories.

A federal court dismissed the complaint, but the 2nd Circuit Court of Appeals in New York ruled last fall that the class-action suit should be allowed to proceed to discovery, or exchange of evidence.

Qwest spokesman Bob Toevs said Monday the Denver telco is pleased the nation's highest court has agreed to review the appellate ruling, "and we are looking forward to briefing the Supreme Court on the issue this fall."

The telcos have argued in court filings that there's no evidence they conspired with one another and that allowing discovery wastes money and the court's time.

In its 43-page decision last fall, the appeals court wrote that the December 2002 lawsuit, "however imperfect," had satisfied its legal burden for discovery to go forward.

"Whether the plaintiffs will be able to prevail in response to a motion for summary judgments (dismissal) after discovery or at trial is, of course, an entirely different matter," the appellate court wrote.

The plaintiffs, represented by the securities law firm Milberg Weiss, allege the conspiracy began in 1996, around the time the Telecommunications Act was enacted to spur competition.  Besides keeping competitors out of their regions, the Baby Bells allegedly agreed not to enter one another's markets.

An amended complaint asserts the Bells control about 90 percent of the local phone business, with none competing meaningfully in other territories.

Plaintiffs pointed in part to a statement by Qwest CEO Dick Notebaert about the difficulty of competing in another region.  The federal court rejected that as evidence suggesting collusion.

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