US West sues over phone number portability rules FCC requirement would prove costly, plaintiff contends

November 20, 1996|By BLOOMBERG BUSINESS NEWS

WASHINGTON -- U S West Inc. filed suit yesterday to challenge Federal Communications Commission rules that require local telephone companies to ensure that customers can keep their current phone numbers if they switch to a competing company.

Complying with the FCC order will cost U S West about $20 million, the company said, and will primarily benefit competitors who enter the market for local phone service in 14 Western and Midwestern states that the company now serves.

Because of the cost, U S West says, the FCC order runs afoul of a constitutional ban on government action that takes private property without just compensation.

"We can't ask customers and stockholders to pay our competitors' business expenses," said Sol Trujillo, president of U S West Communications, the telephone unit of Englewood, Colo.-based U S West.

Suit is filed

U S West said it has asked the FCC to adopt rules to let existing local phone companies recover the costs of setting up so-called "number portability" systems.

Meanwhile, the company filed its lawsuit yesterday at the Court of Federal Claims in Washington, mounting its constitutional challenge to the order.

"When the government orders us to do something, in this case, something that will cost at least $20 million, the Constitution requires there be just compensation," Trujillo said.

"We're [filing suit] because, without a guaranteed cost recovery mechanism in place for interim number portability, U S West Communications' customers and stockholders will be footing the bill."

An FCC official said the agency would have no immediate comment on the lawsuit.

The number-portability rules are designed to promote competition by making sure that customers can keep their telephone num- bers if they switch to a new phone company.

Under the FCC rules, interim number-portability systems are to be replaced in October 1997 by permanent systems.

Latest legal challenge

The suit is the latest in a series of legal challenges by Baby Bell companies, GTE Corp. and other local phone providers about the implementation of a new federal telecommunications law that opens up local telephone markets to competition and lets local phone providers enter the market for long-distance service.

In the most high-profile cases, a Missouri-based federal appeals court has barred implementation of FCC rules about how prices will be set when new competitors enter the local-telephone market.

Pub Date: 11/20/96

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.