U.S. News

Supreme Court Rules for Telcos in Antitrust Suit


The Supreme Court sided with the nation's largest local phone companies in a lawsuit by consumers alleging anti-competitive business practices.

The court ruled 7-2 that the suit lacked any specifics in accusing the companies of secretly agreeing not to compete in each other's territories for local telephone and high-speed Internet service.

The case stems from changes to the telecommunications law in 1996. The local phone companies were to open their monopoly markets to competition. In return, they were given the opportunity to enter long-distance business. At the time, the four companies controlled more than 90% of the market for local phone service.

The defendants were Bell Atlantic, BellSouth, Qwest Communications International , and SBC Communications. Bell Atlantic is now Verizon Communications and SBC bought AT&T and the renamed company, AT&T , merged with BellSouth.

Consumers represented by a prominent firm of plaintiffs' attorneys sued when the companies kept to their own territories rather than competing. The consumers also alleged the local phone companies conspired to keep smaller companies from competing successfully in the larger companies' markets.