The U.S. Court of Appeals in Washington, D.C., sided with incumbent telephone companies Friday, reversing the line-sharing requirements meant to spur competitive availability of broadband Internet services nationwide.

The ruling is consistent with the new administration at the Federal Communications Commission (FCC), which feels it's more important for digital subscriber line (DSL) and cable high-speed access options to compete directly with each other.

The FCC's 1999 Advanced Services Third Report and Order unbundled voice and data traffic, allowing competitive local exchange carriers (CLECs) and Internet service providers (ISPs) to provide a competitive DSL service to customers on the same telephone line.

Before the ruling, competitors were forced to purchase a second phone line for its customers needing a DSL connection, although the Bells themselves put DSL on voice lines.

The four Baby Bells -- SBC Communications, Verizon Communications, BellSouth and Qwest Communications -- have spent the past three years trying to overturn the decision, on the grounds putting voice and data traffic on the same line could have a serious affect on consumer service.

"The court correctly rejected the FCC's 'more is better' approach when determining what network elements incumbents must make available, regardless of the economic impact and regardless of the actual competitive situation in a given market," said Jim Ellis, SBC general counsel.

According to Ellis, the ruling means the FCC must follow the standards of the Telecom Act of 1996, and CLECs will need "make economically rational decisions about investing in their own networks and their own facilities."

The appeals court ruling also advises the FCC to rethink its policy on unbundled network elements (UNEs), which gives CLECs competitive pricing on certain telephone services provided by the Bells.