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VZ Denied Stay in Phone Case

The latest chapter in cable's row with Verizon Communications Inc. (NYSE: VZ) over the telco's phone subscriber retention tactics has come to an end, but another one will soon begin.

In a 2-1 vote, a U.S. appeals court this week denied a request from Verizon to stay a recent Federal Communications Commission (FCC) ruling (FCC Chairman Kevin Martin was the lone dissenter) finding that the company was using illegal methods to keep phone subs from defecting to cable. (See FCC Orders Verizon to Dial Back Win Back Tactics.) Among the arguments in a petition filed June 27, Verizon claimed the FCC cease-and-desist order violates the telco's First Amendment rights and "deprives" consumers from obtaining the benefits of competing offers. (See Verizon Claims First Amendment Foul.)

The FCC order overturned an earlier recommendation by the agency's enforcement bureau to reject the original complaint submitted by Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Bright House Networks on February 11. (See MSOs Sue Verizon and FCC Sides With Verizon .)

A Comcast spokeswoman said the company was "pleased" with the court's decision to reject Verizion's stay request. However, the denial does not spell the end of the case. The appeals court has put it on a "fast-track schedule, instructing both sides to submit legal briefs by Sept. 22," according to Reuters. Verizon was pleased to hear that, and didn't miss an opportunity to take a jab at cable.

"We are pleased the court granted an expedited review, because the FCC order denies consumers the full benefits of competition and puts their money into the pockets of the cable incumbents each day it is in effect," Verizon spokesman David Fish said in an emailed statement.

— Jeff Baumgartner, Site Editor, Cable Digital News

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