The US has suffered a new setback in the government’s attempt to deregulate the US telecoms industry, when a Texan federal court judge overturned key sections of the US 1996 Telecommunications act, in favor of the regional bell telephone companies. SBC Communications Inc and US West Communications Inc brought the action, and in the summing up, Judge Kendall claimed the regional bells had been unfairly discriminated against for the sins of their parent AT&T Corp, and said parts of the Act were unconstitutional. The next step in the legal battle will be an appeal from the US government and the long distance companies AT&T, MCI Communications Corp and Sprint Corp, to the US fifth circuit court, attempting to overturn the Texas decision. This further confuses the American Telecoms industry, where the Bell companies have been restricted entry into the $80,000m long distance market until they open up their local monopoly operations to fair competition. The ruling brings to light the problem with the US telecoms market, since the split up of AT&T Corp in 1984. The market has been artificially divided into two operating regions, which have not cross competed. The telecoms Act was supposed to rectify the situation, but has been widely criticized for failing(CI No 3,312). Whether the European market will follow with similar waves of court action following its January 1 deregulation, is uncertain, although the first clash has already happened between Deutsche Telekom AG and competitor o.Tel.o, which claims it is being over charged for the use of Deutsche’s network.
