The U.S. Circuit Court of Appeals for the District of Columbia will hear oral arguments Oct. 15 on Sprint Nextel's challenge of similar relief granted to Verizon last year following an FCC stalemate.

The FCC also must decide whether dominant companies in several markets should continue to be exempt from charging discounted "special access" rates to wholesale broadband customers, including wireless carriers and smaller competitors.

Both proceedings hinge on whether the telecom marketplace is considered competitive. FCC Chairman Kevin Martin and Commissioner Deborah Taylor Tate, both Republicans, are viewed as supporting deregulation. Democratic Commissioners Jonathan Adelstein and Michael Copps appear to oppose special-access deregulation while backing partial relief on some forbearance requests, sources said.

McDowell's views are less certain, but in September, Qwest temporarily withdrew a forbearance petition after he balked at supporting it, leaving Martin without the votes he needed to grant it.

In 1999, the FCC began relaxing special-access regulations in markets deemed competitive. Companies such as Sprint Nextel and T-Mobile that rely heavily on special-access circuits say rates have risen as a result.

"We spend over 90 percent of our special-access budget with AT&T and Verizon. That's not something we would do willingly," Sprint Nextel spokesman John Taylor said. Noting that only 1 percent of the Sprint network has access to alternative providers, he complained, "We really don't have a choice."

At a House hearing this week, Verizon lobbyist Tom Tauke countered that the telecom market is as robust as ever. "Services to large business customers have also evolved, with lower prices, faster services and increased innovation in product offerings," he said in written testimony.

A congressional source confirmed that House Judiciary Chairman John Conyers, D-Mich., and Rep. James Sensenbrenner, R-Wis., who headed the panel in the 109th Congress, will send the FCC a letter Thursday, urging it to closely examine competition levels before voting on the proceedings. The letter warns that if the agency deregulates too heavily, the lawmakers will review whether antitrust laws should be applied.

"The agency was right eight years ago to allow pricing flexibility for special-access services in markets where competition clearly exists," Republican senators said in a letter Tuesday to the FCC. Sens. Sam Brownback of Kansas, Jim DeMint of South Carolina, John Ensign of Nevada, Chuck Hagel of Nebraska and Mel Martinez of Florida urged the commission to "proceed cautiously as it considers increased regulatory intervention."

The FCC faces an Oct. 11 deadline for action on AT&T's forbearance request and might address related petitions at that time. A decision on special access is expected soon.