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The FCC allowed AOS companies to have airports,
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
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,
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.
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
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
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
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
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
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.
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
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.
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.
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