Supreme Court Asks Government For Its View On Antitrust Claims

Supreme Court Asks Government For Its View On Antitrust Claims

On Jan. 22, the U.S. Supreme Court invited the solicitor general to file a brief expressing the views of the United States on “price squeeze” claims asserted by internet service providers (ISPs) against telecommunications service providers SBC California Inc., Pacific Bell Internet Services and SBC Advances Solutions Inc., now known as AT&T Inc.
 
ISPs linkLine Communications Inc., In-Reach Internet LLC, Om Networks and Nitelog Inc. sell digital subscriber line access to the Internet to retail customers and lease facilities for transmitting data between the Internet and consumers from the defendants.
 
In a Sept. 11 divided ruling, the Ninth Circuit U.S. Court of Appeals held that the Supreme Court’s decision in Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP does not preclude the ISPs’ claims that AT&T created a price squeeze by charging the ISPs a high wholesale price in relation to the price at which AT&T was providing retail services.
 
In Trinko (540 U.S. 398 [2004]), the court held that the failure of a monopolist to deal with a competitor on certain service terms when that monopolist was under no duty to deal with the plaintiff competitor absent statutory compulsion did not state a claim under Section 2 of the Sherman Act. The Ninth Circuit majority concluded that Trinko did not apply because it did not involve a price squeeze claim and that although the wholesale prices the defendants charged the ISPs were regulated by the 1934 Telecommunications Act and Federal Communications Commission decisions, “[a]ny restrictions on pricing at the retail level derive primarily from the antitrust laws.”
 
In seeking review, AT&T  argues that Supreme Court review is warranted because the Ninth Circuit ruling conflicts with the District of Columbia Circuit U.S. Court of Appeals’ 2005  ruling in Covad Communications Co. v. Bell Atlantic Corp 

The case is Pacific Bell Telephone Company, et al. v. linkLine Communications, et al., No. 07-512. A full report on the case appeared in the January issue of LexisNexis Antitrust Litigation News. The publication will continue to follow the litigation in this case.

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