Court defers to FCC on phone line access rules

WASHINGTON (Reuters) - A U.S. court decided on Friday against tinkering with regulations governing telephone lines largely controlled by AT&T Inc (T.N) and Verizon Communications Inc (VZ.N).

The U.S. Court of Appeals for the District of Columbia Circuit issued an opinion deferring any action to the Federal Communications Commission on whether to act on so-called "special access."

In many areas throughout the United States, only one local exchange carrier -- also including Qwest Communications International Inc Q.N -- maintains the special access lines that connect to individual businesses.

Competitors such as wireless provider Sprint Nextel Corp (S.N) that rely on telephone lines that are the remnants of the old Bell telephone company monopoly are pushing the FCC to re-regulate prices for access to those lines.

"Congress and the FCC will be able to reassess as they reasonably see fit based on changes in market conditions, technical capabilities, or policy approaches to regulation in this area," Circuit Judge Brett Kavanaugh said in an opinion.

Sprint has been losing market share to AT&T Verizon Wireless, a venture between Verizon and Vodafone Group Plc (VOD.L).

Sprint has said it spends one-third of the operating costs for its 60,000 cell sites on special access lines.

Ad Hoc, the group that argued the case for large business customers, urged the FCC to take action that reflects "marketplace realities" and revise its rules.

"It is now more important than ever that the current FCC make informed decisions about the high-capacity broadband market," said attorney Colleen Boothby on behalf Ad Hoc.

The FCC could not immediately be reached for comment.

(Reporting by John Poirier; editing by Andre Grenon)