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Critics Renew Blasts at AT&T Judge : Baby Bells, Administration Officials Seek a Showdown

December 29, 1987|From the Washington Post

WASHINGTON — Pressure is mounting again to get Judge Harold Greene out of the telephone business.

It is coming from key officials in the Reagan Administration and, to varying degrees, the seven regional phone companies created in the 1984 breakup of American Telephone & Telegraph Co. Their goal is to end restrictions on these seven "Baby Bells" that are being kept in place by Greene, the controversial and powerful U.S. District Court judge who supervises the consent decree that broke up AT&T.

Their basic pitch, heard ever since Greene entered the picture, is that a federal court is no place to chart the future of one of the country's most dynamic and strategic industries, telecommunications. They contend that Greene is taking a narrow antitrust view of the industry and keeping in place limits that hamper the nation's competitiveness in world telecommunications and keep a range of new information services out of the hands of consumers.

Mobilizing in defense of Greene and his court is an unusual coalition of home and business telephone users, long-distance companies and telecommunications equipment manufacturers. They argue that what Administration officials and Baby Bells want is, essentially, a turning back of the clock to the days before divestiture, to restore a potentially monopolistic system that could wipe out the carefully nurtured competition.

Point man for the escalating campaign against Greene is Alfred Sikes, chief of the National Telecommunications and Information Administration, a Commerce Department agency. Last month, he publicly called on Federal Communications Commission Chairman Dennis Patrick, another of Greene's critics, to countermand a recent ruling by the judge, with the goal of setting up a conflict that would have to be resolved by an appeals court. The FCC has put out a request for public comment on Sikes' proposal.

AT&T's breakup resulted from an antitrust lawsuit brought by the Justice Department. In 1982, the two sides reached an out-of-court agreement in which AT&T agreed to break itself up. Greene formalized the plan in the consent decree and, ever since, various parties have been coming back to him asking for interpretations of the fine print.

'FCC Should Do It'

That has resulted in a stream of opinions from Greene's second-floor chambers overlooking Constitution Avenue, many of which can determine the flow of billions of dollars of telecommunications business and investment money. He has steadfastly refused to lift the constraints on the seven operating companies, contending that conditions have not changed sufficiently to warrant it. There is no sunset for Greene's authority.

Sikes says this system doesn't make sense. "What we now have," he says, "is a judge and two clerks regulating the telecommunications industry and rejecting the recommendations of many expert agencies in what is a highly dynamic field and a frequently hard-to-understand field." He says the agency that Congress created for the job, the FCC, should do it.

This month, Sikes has been talking quietly with other federal officials and executives from the regional companies, to try to draft a common strategy. Last week, he met in closed session with members of the federal government's cabinet-level Economic Policy Council in apparent hopes of getting White House support for legislation on Capitol Hill. No action was taken at the meeting, but the issue is to be discussed again by the council.

The consent decree bars the regional companies from long distance, manufacturing and "information services," the industry's term for the emerging business of moving data from computer to computer over phone lines. The idea behind the restrictions was that, due to their control of local phone networks, the Baby Bells would be able to monopolize unfairly these businesses in the same way that AT&T allegedly did so for long distance and equipment.

Many industry sources say that the council meeting participants focused on a plan that would allow the Baby Bells into any type of information service. It would let them manufacture, with two conditions: special safeguards against them subsidizing this business from rate-regulated operations and time limits on how soon they could sell equipment to themselves. It would also transfer jurisdiction for the long-distance business from the courts to the FCC and local regulators.

Sikes has been highly secretive about his actions. The council meeting was considered by his office to be so sensitive that several hours after it broke up, his spokesman would not say whether his boss had even been present, let alone what he had proposed.

Coalition Shouts Foul

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