Federal judges at oral arguments Friday didn’t appear inclined to...

payments low, a Stifel Nicolaus report said. If the FCC is upheld by the U.S. Court of Appeals for the District of Columbia Circuit, it would be good news for parties including incumbent local exchange carriers and wireless carriers, the research firm said. Verizon, AT&T, Level 3, Sprint, CenturyLink/Embarq and MetroPCS filed in support of the FCC’s order. Upholding the order would be a setback for competitive local exchange carriers and others, including petitioner Core Communications and intervenors Pac-West and EarthLink, the report said. But Stifel noted that oral arguments are sometimes a “shaky indicator” of a court’s ultimate ruling, and this case presents particularly complex statutory intricacies about the FCC’s authority to regulate compensation between phone companies. However, none of the three judges seemed skeptical of the FCC’s reasoning, the report said. Judge Stephen Williams was openly unsympathetic to the arguments of Core and state petitioners, while Judge Raymond Randolph also appeared to push back harder against petitioner arguments than against the FCC’s and those of their telco interveners. Judge David Sentelle made a few comments, but didn’t make negative comments about the regulator’s case, the report said. If the FCC wins, it would preserve current payment arrangements, which would be good for the incumbents, it said. The FCC attorney noted that Level 3 had entered evidence that dial-up still constituted 10 percent of the Internet access market and had been 20 percent as recently as 2007, the report said. If Core were to win, it and others could argue that they were due higher payments, including retroactively. A FCC victory would also remove one potential pressure point for quick regulatory action on intercarrier compensation in general and related universal service funding, giving the commission a little more breathing room to craft an overhaul, though other pressures remain, including from the Bells, the report said.