Supreme Court affirms carriers’ rights to sue state commissions

The United States Supreme Court yesterday ruled 8-0 that telecommunications carriers can sue state public utility commissions in federal court. Justice Sandra Day O’Connor recused herself from the case because she owns telecommunications stock.

Specifically, the Court affirmed the authority of federal district courts to review the orders of state commissions to determine whether those orders comply with federal law.

The decision stemmed from a case involving Verizon Maryland, which had attempted to renege on an interconnection agreement with a competitive carrier in Maryland that later was acquired by MCI WorldCom.

According to Court documents, Verizon told WorldCom it shouldn’t have to pay reciprocal compensation fees for calls made by its customers to the local access numbers of Internet service providers because that traffic was not local traffic subject to the reciprocal compensation agreement.

WorldCom subsequently filed a complaint with the Maryland Public Service Commission, which had approved the original interconnection agreement. The PSC ruled that Verizon had to pay reciprocal compensation for past and future ISP-bound calls. Verizon then challenged that ruling in federal court. The PSC responded by challenging Verizon’s right to appeal, citing immunity provided to it by the Eleventh Amendment, which severely limits the ability of parties to sue states or their officials – when acting in an official capacity – on a federal level.

Mark Rosenblum, vice president – law for AT&T said in a statement that the decision is an “important step” in advancing the implementation of the Telecom Act.

“Congress intended that carriers … would have the ability to go to federal court to make sure that vital interconnection agreements comply with the Telecom Act,” he said. “[Yesterday’s] ruling makes clear we do have that right and clearly supports the Act’s goal of establishing a national policy for telecommunications competition.”

--Glenn Bischoff, Senior News Writer