SANTIAGO (Dow Jones)--Chile's Anti-Trust Court has fined fixed-line communications company Telefonica CTC Chile SA (CTC) for anti-competitive behavior in a case regarding Internet telephone service.

The ruling "obliges CTC to modify the contracts it has with Internet service providers," and tacked on a $1.10 million fine in Chilean pesos, it said in a ruling posted late Thursday on its Web site.

The court ruled in favor of the plaintiff, Voissnet IP, which had said that CTC unfairly sought to bar it from offering phone calls routed through CTC's network. As the dominant fixed-line carrier - with some 70% of phone lines in the South American country - the company faces tight regulatory scrutiny.

CTC has the right to appeal to Chile's supreme court. The company argues that Voissnet by seeking to provide telephone calls from one end user to another, it had to obtain the right to do so through the same regulatory procedures as other telephone companies.

But it also argued that Voissnet would take away business, "which confirms its intention to use its high share and dominance in the market to impede the offer of this new technology to the end consumers," the court said. Additionally, CTC's broadband services aren't regulated, the court said.

It added, however, that in setting the fine it considered the market uncertainty caused by the lack of regulatory definitions in this market as an attenuating factor.

Company Web site: http://www.telefonicactcchile.cl