from larceny.

The FCC allowed AOS companies to have airports,

not the

hotels and other high-traffic sites as their customers actual telephone users. Since the user was not made aware that a "competitive" carrier was involved, there was no informed choice and until recently no choice at all. To CWA and many others, this was a true aberration from the idea of competition.

From our years of observation and participation in the policy debate on telecommunications, we have come to believe that the ordinary consumer has come to be regarded merely as an abstraction. The massive changes in common carrier business have benefited large corporate users and providers, with some tiny fallout for the ordinary user. No provider wants to compete for small users' local business, and it is safe to predict that no one will.

The Congress is being asked to override or lay aside certain parts of the modification of Final Judgment, the consent decree by which the AT&T breakup was accomplished and which set terms, conditions and restrictions. For more than three years the Bell companies have had a steady drumbeat on eliminating the restrictions set as conditions for resolving the government's 1974 anti-trust suit. The arguments once again are directed to having the Congress establish the policy as one of commerce and business, not as an anti-trust matter. We belive the many antitrust suits in common carrier matters were filed because the FCC's regulatory processes were unable to cope the problems the agency itself caused by infusing "competition" in the industry.

For these last 15 years, the argument has been that "unelected" officals of the regulatory agencies and "unelected" Federal

judges were setting the policy; thus the Congress was to come forth with the guidance to help the FCC clear away the

impediments to policymaking.

In the current legislative push, on H.R. 2140 and its predecessor bills in previous Congress, the FCC would be given matters now under the District Court of Judge Harold Greene. A major oversight not addressed in any of the legislation filed to date is that the Federal courts cannot be removed from the policy review process. The Communications Act provides for review by the U.S. Circuit Court of Appeals of FCC actions. And the plain history of the last 20 years shows that FCC actions on "competitive" common carrier issues invariably go to the Circuit Court.

Under the MFJ, the District Court reviews proposals of the Department of Justice, AT&T and the BOCs. The very same U.S. Circuit Court of Appeals to which FCC actions are appealed currently is hearing several appeals of Judge Greene's rulings. It is difficult to perceive how the policymaking process will be favorably affected by passage of H.R. 2140 in its present form, since the basic matters of substance will not be addressed; in other words, the transfer of policy from the District Court to the

FCC — without the Congress' giving specific and long-overdue

guidance to the FCC on these policies

of antitrust suits.

invites a new generation

H.R. 2140 would allow the BOCs into several business areas from which they now are banned by the MFJ. CWA has a direct interest in these areas, because of the effects on the employees we represent and on the consumers.

On Information Services: CWA has registered its support many times to allow BOCs to provide these services. Our major caveat is that the BOCS need to establish procedures to protect true competition, so the companies may set about doing business without the fear of new lawsuits. We believe the marketplace is a better forum than a court to decide these matters. We do observe that many parties opposing the BOCS' entry into information services take the position that it is not possible for the BOCs to be in that line of business without such anti-competitive practices as "crosssubsidy" or "predatory pricing."

We have detected no willingness

of these parties to help in establishing the necessary rules for a fair style of competition. The Bell companies appear to be uniquely situated to offer some services through the network facilities

- services others have not stepped forward to offer. CWA has consistently been in support of letting the BOCs bring out new services to let the prospective customers decide if the market truly exists. Currently, we hear that a vast array of new services is awaiting the go-ahead to come to market. Finally, economic efficiency and probable expanded job opportunities are poiints to consider in favor of the Bell Companies' providing information services.

Last Friday, Judge Greene ended the 7-year ban on AT&T's

participation in "electronic publishing" as of August 24.

Allowing AT&T into this area of information services will increase competition within that area of enterprise, which would be a check on anti-competitive conduct predicted by some parties.

The Bell companies have not yet succeeded in getting the District Court's permission to offer information services. Judge Greene has denied waiver several requests because the BOCs have not come forth with the specific plans by which the adequate competitive framework would be set in place. The BOCS took strong criticism from the Judge, who ruled that they did not supply enough detail as to how competition would be protected.

It would appear to us that if the BOCS seek to enter the information services business and do so without that endless chain of litigation, they ought to devise the appropriate accounting and structural rules to meet the Court's criteria. Securing the Court's permission may require less time than legislaiton.

H.R. 2140's information services provisions impose certain duties on the FCC. Beginning with the Computer II rules, the Commission has moved itself out of regulating the content of

telecommunications and only is involved with the simple transmission of information.

The bill can be construed as

putting the FCC back into regulatory areas it decided to leave in 1980. H.R. 2140 states that it will not affect or supersede the restrictions set by the Cable Policy Act of 1984. Since cable

service is an "information service," we believe this legislation must convey a more explicit treatment to express the intent on Congress. The "or else" is that the courts will be called on to clarify matters, an eventuality that would seem to negate the logic of having the Congress express the policy.

The Congress must examine the cable-telco cross-ownership rules in conjunction with the information services restriction. CWA is not persuaded that the attempts in H.R. 2140 and H.R. 2437 to separate cable-telco and MFJ can withstand analysis.

On Manufacturing:

The manufacture and supply operations of the old Bell System, flowing from the 1956 consent decree, became a key issue leading to the 1974 anti-trust suit and the eventual breakup. Government was concerned that the over 80% share of domestic telecommunications market held by Western Electric Co. was an anti-competitive matter. The divestiture gave the 7 Regional Bell companies priority in buying from Western but at the same time required "open" procuirement from other sources; the Japanese and other foreign suppliers quickly rushed in to take market share, exploiting the newly "open" market. In 1982, the United States' equipment makers had a $1 billion trade surplus in their goods; last year the U.S. market was running a $3 billion trade deficit. It is encouraging that last Thursday, the Commerce Department's International Trade Administration ruled on the AT&TComdial dumping petition that Japan, South Korea and Taiwan had indeed engaged in dumping equipment on the U.S. market at far less than proper and fair market value. The imported equipment in