Update May 2010: The Fifth Circuit overturned the preliminary injunction and granted AT&T’s motion to dismiss on the ground that the federal courts lack subject matter jurisdiction to review the content of interconnection agreements governed by state law.
Update December 2009: Judge Solis denied AT&T’s motion to dismiss & converted the TRO into a PI. The Fifth Circuit denied AT&T’s request for an immediate stay, but agreed to expedited review with arguments set for February 2010.
In Budget Prepay Inc. et al. v. AT&T Inc. et al., Northern District of Texas Judge Jorge Solis issued a temporary restraining order against AT&T Inc., in an antitrust suit, restraining it from 1) discriminating against smaller carriers; 2) implementing restrictions on the resale of cash back offers; and 3) pursuing collection activities against carriers for charges in excess of promotional rates. According to the complaint, AT&T decided to implement a new scheme under which it would no longer resell its services to smaller carriers at wholesale rates and would instead give drastic discounts to its retail customers. Plaintiffs further alleged that this predatory pricing program would lead to a 94 percent decrease in the smaller carriers’ profitability and would put them out of business.