Close but some syntactic errors do exist in your code. Try this:

(Formatted for readability)
---
<asp:Label ID="PhoneLabel" runat="server"
  Text='
        <%# String.Format("{0:(###) ###-####}",
Int64.Parse(Eval("BillingPhone")))
        %>
      ' />
---

Haven't tested this but it should be a better way to do it.

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