High court to review lawsuit against AT&T

The Supreme Court intervened Monday in a lawsuit by an Internet service provider accusing AT&T of anti-competitive practices.

AT&T had asked the justices to step into the dispute over wholesale prices AT&T charges for high-speed service to Internet service providers who then compete with AT&T for retail Internet customers.

AT&T says it is under no obligation to deal with the Internet service providers and that the lawsuit should be thrown out for failing to state a valid legal claim.

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The plaintiff in the lawsuit, LinkLine Communications Inc., buys high-speed service from AT&T, combines it with other services and then sells Internet-access service that compete against AT&T.

The 9th U.S. Circuit Court of Appeals in San Francisco ruled against AT&T, saying the telecom company was setting its wholesale prices so high that the Internet service provider could not compete with the low prices AT&T charged in the retail market. The appeals court said that federal courts have recognized such price squeeze allegations for six decades.

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The Bush administration had urged the Supreme Court to take the case as AT&T requested.

The case is Pacific Bell Telephone Co. d/b/a AT&T California v. LinkLine Communications Inc., 07-512.