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

The 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 was 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 federal law, such a petition is deemed granted if the FCC does not act on it within a specified period of time.

The FCC never formally approved a decision on Verizon's petition, but 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 court said it agreed that the deadlocked FCC vote did not represent denial of the petition and that Congress had directed the agency to treat a petition it does not deny as granted.

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

The FCC declined to comment on the court ruling.

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 reevaluating its procedures for so-called forbearance cases.

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 and John Wallace)

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