U.S. Supreme Court is expected to act as soon as Mon. on TELRIC (...

one argued in Oct. that hasn’t yet been decided. Court, which returns Mon. after 2-week recess, soon will close down for summer so many decisions generally are issued this time of year. Case challenges pricing standard set by FCC that requires ILECs to base their charges to competitors on “forward-looking” costs rather than actual “historical” costs of building their networks. Eighth U.S. Appeals Court, St. Louis, vacated TELRIC standard in 2000. It upheld forward- looking concept but rejected “hypothetical” nature of TELRIC. FCC sought Supreme Court review of lower court’s decision on TELRIC while ILECs sought review of 8th Circuit’s support for forward-looking costs. In another part of case that didn’t get much discussion during oral argument, lower court also ruled that Telecom Act prohibited regulators from requiring ILECs to combine previously uncombined network elements for CLECs. Legg Mason analysts speculated in report Thurs. that most likely Supreme Court action would be to uphold FCC’s forward-looking approach but remand TELRIC to FCC for modifications. “While the long-term effect depends on the details of the court’s instructions, in the short term the decision would be negative for the CLECs and IXCs and good for the Bells,” said Legg Mason’s Rebecca Arbogast and Michael Balhoff. In first place, “we believe that this FCC would develop pricing rules that would be more Bell friendly,” they said. In addition, any remand would cause more uncertainty, “damaging the operating plans and the access to capital of the CLECs and the IXCs,” report said. Remand also could cause enough additional work for FCC that other proceedings such as UNE review and broadband regulation could be delayed, analysts said.