A federal appeals court on Friday let stand a 2006 action by the U.S. Federal Communications Commission that lifted some regulations on Verizon's broadband business.

The U.S. Court of Appeals for the District of Columbia said it would not review a challenge, filed by Sprint Nextel, other telecommunications carriers and the New Jersey Division of Rate Counsel, that contested the way the FCC decision was reached.

At issue is a petition by Verizon to the FCC asking the agency to waive regulations on its broadband business on the grounds that they were no longer necessary. Under FCC rules, such a petition is deemed granted if the commission does not act on it within a specified time period.

Even though the commission never formally approved a decision on Verizon's petition, the company's request took effect in March 2006 because the FCC commissioners were deadlocked on the issue. The agency's two Democratic commissioners objected to broad deregulation, saying it threatened to bring higher prices and less choice.

The deadlocked vote cannot be considered an order of the commission, nor can it constitute agency action, the court said.

We also recognize that because a deadlocked vote is unreviewable, we lack jurisdiction in what may be the hardest cases -- cases in which the forbearance petition raises such difficult issues that it produces an equally divided vote among the commissioners, the three-judge panel said.

Among other things, the broadband service regulations lifted on Verizon included requirements for making connections to competing networks and negotiating just and reasonable terms for its services.

The Verizon case prompted criticism from some members of Congress, and the agency is in the midst of re-evaluating its procedures for so-called forbearance cases.

The court noted that it agreed the deadlocked vote did not represent the FCC's denial of the petition and that Congress directed the FCC to treat a petition it does not deny as granted.

The Friday court ruling was posted on the Internet at pacer.cadc.uscourts.gov/docs/common/opinions/200712/06-1111a.pdf.

(Reporting by Julie Vorman; Editing by Lisa Von Ahn)

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