Court Upholds Right To Sue Under Communications Law

Tuesday, April 17th 2007, 9:38 am

By: News On 6

WASHINGTON (AP) _ The Supreme Court on Tuesday upheld the right of companies to sue over alleged violations of federal communications law and reinforced the regulatory authority of the Federal Communications Commission.

In a 7-2 decision, the court said that pay-phone provider Metrophones Telecommunications Inc. may pursue a suit against Global Crossing Telecommunications Inc.

At issue are payments for coinless calls on Metrophones' payphones over Global Crossing's network. The calls involve special access codes such as 1-800 or 10-10-220.

Global Crossing says past Supreme Court decisions make clear that a right to sue must be based on a violation specified in law rather than in regulations.

The federal government had said that Global Crossing's position would undermine the FCC's enforcement authority, transforming much of the agency's policing function ``into an essentially useless irrelevancy.''

It is well within the FCC's authority to find that Global Crossing engaged in an ``unreasonable practice'' by failing to follow a commission's order to make the payments, Justice Stephen Breyer wrote in the majority opinion.

Global Crossing's lawyers said that nothing in communications law requires carriers to compensate payphone operators for coinless calls, much less the 24-cent-per-call rate specified in federal regulations in 1999-2001, the time frame that is at issue in the case.

The 9th U.S. Circuit Court of Appeals had held that the law's general prohibition against ``unjust and unlawful'' practices enabled Metrophones to sue.

The commission issued an order in 2003 applying the ``unjust and unlawful'' language to address concerns of payphone providers like Metrophones.

Communications law does not expressly mention many practices which the commission has moved aggressively to stop.

The practices include unauthorized switching of telephone carriers, called ``slamming;'' negligent disconnection of phone numbers; unreasonable directory assistance practices; charging customers for rejected collect calls; deceptive marketing practices; violations of number portability rules; and failure to comply with terms of a merger.

The case is Global Crossing v. Metrophones, 05-705.