GTE files in Federal Court of Appeals for review of the FCC's Interconnection Order

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WASHINGTON -- GTE today filed a Petition for Review in the U.S. Court of Appeals here challenging the Federal Communications Commission's (FCC) Interconnection Order.

The action follows GTE's motion filed with the FCC last week to halt the implementation of the order, pending judicial review. If the FCC fails to grant a stay, GTE said it will request a stay of the rules from the Court.

The FCC's order establishes rules for enforcing the Telecommunications Act of 1996, which Congress passed in February. Among the order's provisions is a national pricing formula for calculating wholesale prices for lease of local telephone networks to competitors. Under the order, local phone companies that have built and operated the local network would be required to wholesale both their services and parts of their network to resellers at prices substantially below actual cost.

"In our view, the FCC's Interconnection Order stands Congress' intention in passing the Act on its head," said William P. Barr, GTE senior vice president and general counsel. "Local phone companies would be required to subsidize resellers that include some of the largest corporations in the country. Here's what will happen if they are given such heavily discounted access to the existing network: the resellers will have little incentive to build networks of their own, so the Act's promise of new jobs dissipates; and the existing local companies won't have adequate capital for expanding and offering the new services customers want. Where is the consumer benefit in all of that?," asked Barr.

"Congress intended the Telecommunications Law to remove unnecessary barriers to competition and let the free market, not federal regulators, choose the winners and losers. Getting back to the original goal of the legislation is what this lawsuit is all about," said Barr.

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