Court Voids Long-Distance Regulation

A U.S. appeals court struck down a key regulation that annually reduces the billions of dollars long-distance companies must pay local phone companies for completing their calls. The Federal Communications Commission in 1997 decided that the fees paid primarily to the Baby Bell companies and GTE Corp. by long-distance companies should decline by 6.5% per year. The U.S. Court of Appeals for the District of Columbia said the agency had not provided an adequate explanation of how it reached the 6.5% rate, known as the X-factor. FCC officials were still studying the decision but planned to ask for a temporary stay promptly, a spokeswoman said. A “very pleased” U.S. Telephone Assn., which represents local phone companies, had contested the FCC’s decision in court, saying the agency’s calculations made unjustified cuts to the fees. AT&T; Corp. and MCI WorldCom Inc. also challenged the calculations but for opposite reasons, arguing for deeper cuts.