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from larceny.

The FCC allowed AOS companies to have airports,

hotels and other high-traffic sites as their customers

not the

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


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



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 18 safe to predict that no one


The Congress 18 being asked to override or lay as ide certain parts

of the modification of Final Judgment, the consent decree by

which the AT&T breakup was accomplished and which set terms,

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having the Congress establish the policy as one of commerce and

business, not as an anti-trust matter.

We belive the many anti

trust suits in common carrier matters were filed because the

PCC'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 hel•p 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 18 that the Federal courts cannot be removed from the policy review


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 18 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


without the Congress' giving specific and long-overdue

guidance to the FCC on these policies

invites a new generation

of antitrust suits.

H.R. 2140 would allow the BOCs into several business areas from

which they now are banned by the MPJ.

CWA has a direct interest

in these areas, because of the effects on the

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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 18 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 18 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 18 not possible for the BOCs to be in that line

of business without such anti-competitive practices as "cross

subsidy" or "predatory pricing."

We have detected no willingness

of these parties to help in establishing the necessary rules for a

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CWA has consistently been in support of letting the BOCs bring out

new services to let the prospective customers decide if the market

Currently, we hear that a vast array of new

truly exists.

services 18 awaiting the go-ahead to come to market.


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

to how competition would be protected.


It would appear to us that if the BOCs seek to enter the

information services business and do 80 without that endless chain

of litigation, they ought to devise the appropriate accounting and

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putting the FCC back into regulatory areas it decided to leave in


H.R. 2140 states that it will not affect or supersede the

restrictions set by the Cable Policy Act of 1984.

Since cable

service 18 an "information service, " we believe this legislation

must convey a more explicit treatment to express the intent on


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 18 sue leading to the 1974 anti-trust suit and the eventual


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&T

Comdial 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

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