If you own the line you should be able to do what the hell you want with it. Blackmail involves the violation of individual rights; there is no such thing here. Considering the billions spent on the network, regulation of this sort is clearly a taking and is theft.
As for your AT&T scenario, that already happens with cell phones. Say you’re with AT&T (Cingular when they merge with BellSouth) and the only towers in the area where you live are Sprint. AT&T has to pay Sprint everytime you make call that connects through their tower. Usually if about 70% of your calls go through another providers tower then you become unprofitable and they cell company drops you.
If there was true competition instead of two, quickly becoming one, choice, your point would be valid.
But it's not.
There is regulation and local monopolies. The choice is not free competion or regulation, but the right regulation.
Raymann, you are wrong.
There is no settlement between wireless companies for (local to local) calls. This same non-settlement scenario prevails more and more for wireline calls too.
Access charges do remain for the receiving company on any scenario where a long distance call is delivered to the local company, either wireless or wireline. And in this scenario, ATT attempts to cheat on their payments across the board.