The U.S. Supreme Court unanimously sided with AT&T today in a "price squeeze" lawsuit from 2003.
Companies including Linkline Communications claim that AT&T's Pacific Bell telephone subsidiary was charging exorbitantly high prices for access to its transmission lines, which it's required to sell under federal law. Smaller Internet Service Providers such as LinkLine purchase the access wholesale, package it with other services and sell it to consumers. The plaintiffs said AT&T was then undercutting its competitors by selling for low prices on its own in the retail market.
Chief Justice John Roberts wrote that the retail and wholesale claims cannot succeed on their own, and together they can't be combined into one antitrust liability. "Two wrong claims do not make one that is right," he wrote. Previously, the 9th U.S. Circuit Court of Appeals found that AT&T had indeed set prices too high for competition.
There is an opportunity for the plaintiffs to continue their fight in U.S. District Court. A retooling of the complaint would see AT&T defending itself against "predatory pricing." However, Roberts wrote that such a claim "may not survive a motion to dismiss."
“We highly value our ISP customers, and believe we operated, and continue to operate, properly and fairly in setting wholesale and retail prices,” an AT&T spokeswoman wrote to Bloomberg an e-mail.
