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1 December 2005

Illinois Supreme Court Upholds 2001 Telecommunications Law
Mayer, Brown, Rowe & Maw LLP

1 December 2005, Chicago - The Illinois Supreme Court has upheld the constitutionality of the Illinois legislature's 2001 comprehensive reform of Illinois telecommunications law. Mayer, Brown, Rowe & Maw LLP represented Illinois Bell before the court in support of the law, Big Sky Excavating Co. v. Illinois Bell Tel. Co., No. 99380 (Illinois Supreme Court).

In 2001, the Illinois General Assembly enacted a comprehensive reform of Illinois' telecommunications law. One provision of the new law permanently abated an ongoing investigation by the Illinois Commerce Commission into Illinois Bell's 1998 classification of business services as "competitive" - that is, as services that were reasonably available from another provider and therefore could be the subject of rate changes without prior Commission approval. The General Assembly required Illinois Bell to refund $90 million to its business customers and to pay another $30 million into the State's Digital Divide fund. But it also declared all of Illinois Bell's business services competitive on a going forward basis, subject to a four-year moratorium on any additional increases of the rates charged to small businesses.

Plaintiffs challenged the constitutionality of the 2001 telecom rewrite and sought a rollback to 1998 rates and a refund of all post-1998 rate increases to small business customers. The Madison County Circuit Court certified a class and declared the statute unconstitutional, on the ground that it was impermissible special legislation and violated the equal protection and due process rights of small business customers, who supposedly would have received larger refunds had the Commerce Commission proceeding been allowed to run its course. On direct appeal, the Illinois Supreme Court unanimously reversed. In an opinion issued on December 1, 2005, the Court held that the statute did not discriminate in favor of Illinois Bell to the detriment of other similarly situated carriers because there were no similarly situated carriers; it also concluded that the circuit court had erred in concluding that the statute was not reasonably related to a legitimate state purpose. The Court held that it was for the General Assembly to decide whether the approach to deregulation chosen in the 2001 Act was wise. The Court also rejected plaintiffs' due process challenge on the ground that consumers had no vested right to a refund.

Mayer, Brown, Rowe & Maw LLP partner Michele Odorizzi argued the case in the Illinois Supreme Court. She and partners John Muench and Robert Dow, Jr. worked on the briefing.

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