Covad, BellSouth Case Marches On

Covad and BellSouth are both claiming victory after the latest ruling in their 4-year-old antitrust battle.

On Friday, the U.S. Court of Appeals for the Eleventh Circuit said the competitive communications company could pursue “several (but not all)” of its antitrust claims against the Baby Bell.

The original lawsuit, which was dismissed in a district court, alleged that BellSouth blocked Covad from accessing collocation facilities it needed to offer DSL service in the Baby Bell’s territory.

Then, a related U.S. Supreme Court case (Verizon versus Trinko) upheld the dismissal of an antitrust case that alleged a single breach of a Baby Bell’s duty under the telecom act of 1996 to share its network.

Friday’s decision breathes life into Covad’s case.

“Many, including BellSouth, believed that the Supreme Court’s Trinko decision made antitrust suits challenging monopoly abuses by incumbent phone companies impossible,” James Kirkland, Covad’s general counsel, said in a statement. “We are pleased that the Eleventh Circuit has reaffirmed.”

A Covad spokesperson said the company will now file paperwork to return the case to district court.

For its part, BellSouth celebrated the fact that the many of the charges were thrown out.

“We are pleased that the Eleventh Circuit followed the Supreme Court’s well-reasoned decision in Trinko and dismissed the vast majority of Covad’s claims,” Joe Chandler, a spokesman for BellSouth, told

The legal maneuvering comes at a time of great flux between competitive carriers and incumbents. In a major policy shift, the Bush Administration recently declined to appeal a lower court ruling that tossed out regulations forcing Baby Bells to provide discounted access to their lines for competitors.

The move is expected to spark a round of new negotiations among Baby Bells and rival providers that heretofore leased the Bells’ lines at a discount.

Ironically, Covad has been out in front of the trend. That company negotiated a three-year pact with Qwest that will allow the broadband provider to deliver DSL service over the telecom’s local phone lines.

It marked the first time a competitive carrier such as Covad and a Baby Bell have negotiated commercial line sharing terms.

A Covad spokesperson said the lawsuit doesn’t preclude the company from negotiating a similar deal with BellSouth, noting that the company wants “mutually agreeable” contracts with all four Baby Bells (Verizon and SBC are the others).

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