AT&T cleared in Linkline case

AT&T has been cleared of anti-trust charges

AT&T has been cleared of anti-trust allegations by the US Supreme Court, which ruled on Wednesday that the company did not violate any laws with its pricing for wholesale DSL access.

The charges were initiated in 2003 by Linkline Communications, a competing ISP that purchased DSL access from AT&T and then bundled the internet service with other offerings to compete against AT &T's own retail DSL operations.

AT&T owns and operates lines used for DSL services, and is required by law to allow other companies to purchase the service wholesale and run competing services.

Linkline had alleged that, in an effort to drive out competitors, AT&T had artificially raised prices for wholesale access so as to drive down competitors' profit margins and give its own DSL service an advantage in the market.

In a unanimous ruling, however, the Supreme Court rejected Linkline's contention that AT&T's DSL system constituted an ISP monopoly, particularly in light of increased competition from cable broadband systems. As such, the court ruled that the company had not violated anti-trust laws in regards to " price squeezing".

"If both the wholesale price and the retail price are independently lawful, there is no basis for imposing anti-trust liability simply because a vertically integrated firm's wholesale price happens to be greater than or equal to its retail price," wrote chief justice John Roberts.

The Supreme Court decision overturns an earlier ruling by a district court which had found in favour of the plaintiff.