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to rule on the lawfulness of the strategically priced tariffs included in its tarift investigation. Key Congressional leaders, FCC Commissioner Dennis, and NTIA have all suggested that the

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suspend investigate wide variety of

tariff submissions by local exchange carriers, in particular those of the BOCS, despite the submission of petitions seeking such action. The FCC has applied such terms as "patent violation" and "patently unlawful" (which heretofore served as the standard for outright rejection of a tariff submission) as the rationale for determining whether or not to investigate tarift filings.

The precise phraseology varies from one order to another. Two of the most common variations state that the subject tariff "is not so patently unlawful" as to require FCC investigation, or

that the tarift submission does not appear to involve "any patent

violation of the communications Act." Many of these tarifi orders involve rate increases of hundreds of millions of dollars. Tariffs that have been permitted to go into effect because they are not patently unlawful

ipso facto, "just and reasonable" as the Communications Act requires. ICA submits that these tarift decisions cannot be construed to fall within the



"zone of reasonableness" required by the communications Act.

Customer Proprietary Network Information

The Bell Operating companies, by virtue of their local telephone monopolies, maintain records regarding the amount, type, pattern, location, duration, and direction of telecommunications traffic from every telephone subscriber, whether business, institutional, or residential. This

information is highly confidential as it can reveal proprietary marketing strategies, expansion plans, innovative



telecommunications, and other confidential information. CPNI is extremely confidential and improper disclosure could be adverse to the customers own interests. Unfortunately, the FCC has made the treatment of CPNI exceedingly more difficult since it now allows all operations the BOCS, both regulated and non-regulated,

to have an affirmative interest in CPNI unless the business

customer specifically requests that its records be restricted. All of the other telecommunications and information suppliers in the industry are required to seek permission of the customer before gaining access to any of the CPNI records. Customer are

confronted with more difficult process to keep their records confidential and industry competitors





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One reason for the Commission's failure to resolve users'

fundamental problems with the existing system of regulation is

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additional resources to do so. The FCC has compounded this problem by adopting rules that are more resource intensive than its earlier rules, such as its Computer III regime.

ICA is concerned that the added burdens of administering any legislative modification of the consent Decree will be whelming in light of the FCC's existing resource problems.

Another possible explanation for the Commission's failure to remedy users' concerns with the existing method of regulation is the lack of a consistent commitment by the present Commission leadership to effective regulation and pro-competitive policies

of earlier Commissions.

Until the FCC demonstrates that

it has both the resources and the willingness to work toward the


resolution of users' concerns, the Congress should not consider the FCC as a tool to be relied upon for carrying out any of the responsibilities presently administered by the court under

the terms of the consent Decree.


Any discussion of the AT&T Consent Decree must include a

review of the anti-competitive abuses of the Bell System that caused the parties to eventually agree to break up the Bell System. The competitive markets that now exist outside of the

local telephone monopoly have served this country well.

ICA has

appended to this testimony (see Appendix A)

a speech made by a

lawyer, now in private practice, who was closely involved with the Department of Justice's antitrust case against the Bell

System since the

case's inception.


comments provide an

insightful reminder of the abuses that brought us to the eventual

breakup of the Bell System.

This Subcommittee has crafted the antitrust laws that served

as the basis for the suit that was filed by the Department of

Justice against AT&T in 1974.

The Subcommittee played a major

role in the developments surrounding the case.

Despite being

subjected to massive lobbying by the Bell System and legislative

initiatives by the Energy and Commerce Committee of the House of

Representatives, this Subcommittee defeated legislative attempts to influence or terminate the case against AT&T. Finally, in

1982, after AT&T and the Department of Justice ("DOJ"), not Judge

Greene, had decided to attempt to terminate the case by proposing

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additional hearings in order to ensure that the antitrust laws were able to be carried out by the court.

Judge Greene's speech before the American Bar Association on

August 9, 1988, provides insight into his view of how the consent

Decree was arrived at.

"There was considerable evidence at the

trial that AT&T used its continuing monopoly

in local transmission to disadvantage the

emerging competitors. The means were simple: the independents were prevented by various

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subsidizing its own competitive operations with revenues from its regulated, competi

tion-free markets.

"Suit was brought under the Sherman Act

in 1974 during the Ford Administration to halt these practices. Following a discovery

process involving tens of millions of docu

ments, and

an eleven-month trial at which

hundreds of witnesses testified, that suit was ultimately settled in 1982 by a consent

decree within weeks of the trial's scheduled

A principal issue at the trial


and in the approval of the consent decree was

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