US court to review suit against AT&T

The US Supreme Court intervened in a lawsuit by an internet service provider accusing AT&T of anti-competitive practices, an Associated Press report said.

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, the report said.

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.

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

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.

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