The U.S. Supreme Court Tuesday rejected an appeal from a unit of AT&T Corp. (T) challenging an antitrust lawsuit brought by several Internet service providers. The California Internet service companies sued the Pacific Bell unit in 2003, alleging the regional phone company charged them high wholesale prices for access to high-speed digital lines.

Federal telecommunications laws require regional phone companies to sell access to competitors. The companies, including Linkline Communications Inc., Nitelog Inc. and In-Reach Internet Inc., said they couldn't compete with the AT& T unit's own high-speed Internet service prices to consumers because of the " price squeeze."

When the lawsuit was filed, the AT&T unit was part of SBC Communications Inc., which has since merged with AT&T.

A U.S. District Court allowed the antitrust lawsuit to proceed and the 9th U.S. Circuit Court of Appeals in San Francisco affirmed that ruling.

The AT&T unit, in the Supreme Court appeal, said there are several problems with the Ninth Circuit ruling, including conflicts with a recent telecommunications antitrust ruling by the high court. "The decision promises to deter price cuts that benefit consumers," the AT&T unit said.

The Internet companies said the AT&T unit's actions that led to the lawsuit " amounts to a refusal to provide competitors the same services or prices otherwise made to petitioners' retail customers."