The U.S. Appeals Court, D.C. rejected claims by AT&T that the FCC...

extent that the N.Y. case was the first to be addressed in federal court. If the court had ruled otherwise the decision could have been very disruptive for Verizon and other Bells, officials said. The question in the case was straightforward: Under the Act, when a Bell receives permission to offer long distance services under Sec. 271 for 3 years long distance and local services must be separate, including separate offices and service trucks. But after 3 years, unless FCC deems otherwise, that requirement ends. In the N.Y. case the requirement ended and AT&T sued. Judges appeared skeptical of AT&T’s arguments in April (CD April 16 p7), so the decision wasn’t a surprise. “In this action, petitioner AT&T Corp. contends that the FCC acted arbitrarily and violated its duty of reasoned decision-making when it issued a public notice stating that the Sec. 272 safeguards sunset for Verizon’s operations in New York ‘by operation of law,'” the court said in an opinion issued Tues.: “AT&T argues that the record here demonstrates that Verizon retains significant market power, justifying the need for continued application of the Sec. 272 safeguards in New York. Thus, according to AT&T, the FCC was obliged to provide a reasoned explanation for its failure. We reject these claims.”