July 17 (Bloomberg) -- Regulators acted reasonably in freeing AT&T Inc. and other carriers from some rules governing how they sell high-speed data services to competitors and other businesses, an appeals court ruled.

The Federal Communications Commission wasn’t arbitrary when it decided that the carriers who provide “last mile” broadband services for business customers should be subject to only common-carrier regulations, the U.S. Court of Appeals in Washington ruled.

The ruling is “an important legal victory” for AT&T, CenturyTel Inc., and Frontier Communications Corp., said Rebecca Arbogast and David Kaut, Washington-based analysts at Stifel Nicolaus & Co., in a note.

The FCC decision preserved by today’s ruling gives the companies greater leverage to demand favorable terms and conditions from competitors such as Littleton, Colorado-based TW Telecom and Herndon, Virginia-based XO Holdings Inc., Kaut and Arbogast wrote.

A coalition including Sprint Nextel Corp., TW Telecom Inc. and Deutsche Telekom AG’s T-Mobile unit said on June 22 that regulators should force AT&T and Verizon Communications Inc. to reduce the prices they charge for use of high-capacity telephone lines that carry Internet traffic. Sprint relies on special- access connections to link its 60,000 wireless towers and provide broadband services to business customers.

‘Reasonable and Reasonably Explained’

The loser of today’s appeal, the Ad Hoc Telecommunications Users Committee, a coalition of businesses and high-speed Internet providers, called on the FCC to revisit the issue.

“Businesses have paid too much for these services,” the committee said in a statement.

The three-judge panel said in its opinion issued today that the FCC’s decision “to recalibrate the degree of regulation imposed” on the lines “to be reasonable and reasonably explained.”

AT&T, Verizon and Qwest Communications International Inc. are the three biggest local-phone companies and are major providers of broadband services to businesses. The companies say the market for such services is competitive and they don’t overcharge.

“We are delighted with the court’s decision,” Robert Quinn, AT&T’s senior vice president-federal regulatory, said in an e-mailed statement.

Sprint spokesman John Taylor didn’t immediately return a telephone call seeking comment.

AT&T, based in Dallas, rose 27 cents to $23.98 at 4 p.m. in New York Stock Exchange composite trading. New York-based Verizon rose 9 cents to $29.59. Denver-based Qwest rose 6 cents to $3.99. Sprint, based in Overland Park, Kansas, fell 7 cents to $4.59.

The case is Ad Hoc Telecommunications Users Committee v. Federal Communications Commission, 07-1426, U.S. Court of Appeals, District of Columbia Circuit (Washington).

To contact the reporter on this story: Cary O’Reilly in Washington at caryoreilly@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net

Last Updated: July 17, 2009 16:20 EDT