The U.S. Court of Appeals for the District of Columbia denied the United States Telecom Association's request to block the rule from taking effect Monday for people living in the 100 most-populous metropolitan areas.
It did, however, agree to hear the lawsuit brought by the association, the trade group for local phone companies, which claims the new rule favors wireless carriers.
The court, in an unsigned order, told the Federal Communications Commission to respond by Wednesday and for the trade association to reply by Dec. 2.
"We are pleased to have the opportunity to demonstrate to the court how the commission's action will unfairly limit the choices available to consumers and distort competition among telecommunications service providers," said Walter B. McCormick Jr., president of the trade group.
FCC spokesman David Fiske said the agency would vigorously defend the rule.
The FCC says that allowing consumers to keep their home phone numbers even if they trade in their corded handset for a cell phone will boost competition.
The rule for switching cell phone providers, who will be allowed to keep their numbers even if they change companies, would not be affected by the lawsuit. That rule also goes into effect Monday.
Consumers already can keep their numbers when switching local landline phone companies.
Local phone companies are upset because a customer wishing to transfer a number from a cell phone to a landline phone can only do that if the exchange — the three digits following the area code — falls within the same geographic area. That area is known as a "rate center," in which the house or business is located.
BellSouth Corp. has estimated the rules will allow local phone companies to go after only about an eighth of cell phone customers, but the wireless industry faces no similar restrictions because their phone number exchanges cover a much larger geographic area.
While BellSouth supports the suit, the other three remaining Baby Bell phone companies created by the breakup of AT&T are not involved. SBC Communications and Verizon are not part of it. Qwest Communications Inc. is not a member of the trade association.