 smaller markets. Under the terms of federal communications law, the FCC is required to consider reasonable changes to the rules it oversees that affect the communications marketplace and the public it serves. Since some of Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright © 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. The Byzantine World of Telecom Regulation The Byzantine World of Telecom Regulation these laws were first written into law over 50 years ago, they are in dire need of revision. In many cases the changes are driven by the growing influence of the cable and Internet-dominated sectors. Recent Events In March 2004, an appeals court struck down FCC rules for how regional telephone companies must open their networks to competitors. Federal law originally required regional phone companies to lease parts of their networks (the UNE-P mandates) to competitors at reasonable rates, set by the states. The ILECs have long contended that they have been forced to give competitors rates that are below their actual cost. In its decision, the appeals court found that the FCC wrongly gave power to state regulators to decide which parts of the telephone network had to be unbundled. The court also upheld an earlier FCC decision that the ILECs are not required to lease their high-speed facilities to com- petitors at discount rates the way they do their standard phone lines. In April 2004, regulators rejected AT&T's petition to eliminate the requirement that they pay long-distance fees on calls transported par- tially over the Internet. The decision means that AT&T may be required to pay hundreds of millions of dollars in unpaid retroactive fees to the ILECs. Earlier in 2004 the FCC ruled that calls that originated and termi- nated on the Internet, such as those made using Skype, Vonage, and other voice-over-Internet service providers, are free from the fees and taxes that traditional phone compani