WASHINGTON (AP) – The Supreme Court refused Monday to intervene and temporarily save phone competition regulations that force regional carriers to share their networks with competitors at discounted rates.

The regional companies said the decision would have no immediate effect on service or prices. Long-distance companies, which want a bigger share of the local market, said it could lead eventually to higher rates and less competition.

Chief Justice William H. Rehnquist refused to grant a stay sought by AT&T, MCI Inc. and an association of state utility regulators.

The decision means that government network-sharing rules intended to make local phone service more competitive will expire Tuesday. The rules were thrown out by an appeals court, and the Bush administration decided last week not to ask the Supreme Court to review the lower court’s decision.

Consumer groups as well as the long-distance carriers have said prices for millions of phone customers probably will go up when the rules expire. Federal Communications Commission Chairman Michael Powell has disputed that, saying he believes “people sort of exaggerate what happens.”

Powell said last week that work was beginning on new rules.

The expiring FCC rules allowed states to require the regional carriers – Verizon Communications Inc., BellSouth Corp., Qwest Communications International Inc. and SBC Communications Inc. – to lease parts of their networks at low prices in an effort to boost competition for local phone service. In March, the U.S. Court of Appeals for the District of Columbia said the government had not justified a need for the rules.

Despite the administration’s decision to drop the case, others unsatisfied with the ruling decided to go to the Supreme Court.

Utility regulators in Michigan and California and a national association of regulators told Rehnquist in an emergency appeal filed Thursday that the ruling prevented states from helping foster local telephone service competition.

The decision “jeopardizes the local telecommunications competition that has developed over the last decade,” Washington lawyer James Bradford Ramsay wrote.

The Supreme Court will announce this year whether it will hear the broader appeal. The government’s decision not to request the action makes high court review less likely.

MCI said again Monday that it may have to raise rates and abandon some markets, but the company offered no specifics.

The regional carriers said they would not raise immediately the prices that competitors pay for use of their lines and other equipment. They also said service would not be interrupted.

Companies such as MCI pay regional carriers monthly for each phone line. The price varies by state and region; most state prices are in the low $20s. Verizon, the largest regional, said it would like to raise prices $6 or $7 a line over three years.

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On the Net:

Supreme Court: http://www.supremecourtus.gov/

AP-ES-06-14-04 1716EDT