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.
