groups of ratepayers would be available to bear the costs of the rural facilities, and access charges would thus be lower for the rural ratepayers than they would be if these areas stood on their own.
This argument will not be accepted because the State is not correct in its basic premise: that access charges will be set on a LATA-specific basis. The State's comments and reply comments were filed before the FCC released its decision regarding the setting of interstate access charges on December 22, 1982. See supra at slip op. at pp. 14-20. That decision essentially forecloses the possibility that separate access charges will be set for each LATA according to the costs of the Operating Company's nontraffic sensitive plant in that LATA. See In the Matter of MTS and WATS Market Structure, supra at PP 323-26. It appears from that decision that, with the possible exception of setting some access charges on a "study area" basis, see id. at P 326, the FCC will establish access charges which apply to the entire territory served by an Operating Company. Similarly, California as well as the other states will have full authority to transcend LATA boundaries in the computation of access charges for intrastate calls.
There is thus little need to combine proposed LATAs in an attempt to spread the Operating Company's costs and thereby to equalize access charges within a state. Due to the foregoing, and given that the Bakersfield, Chico, and Monterey LATAs each contain no fewer subscribers than many other LATAs, the Court will not approve the State's requested consolidation,
but will approve the LATAs as proposed.
Turning to the remaining LATAs, the Court approves the consolidation of Modesto and Stockton because of Pacific Telephone's plan to rehome Modesto's Class 4 traffic onto its Stockton facilities when the Modesto Class 5/4 office exhausts its processor capacity as is expected to occur in 1985. This plan will minimize the impact on ratepayers caused by network adjustments.
No objections were received pertaining to the Sacramento, Fresno, and San Diego LATAs. The Department of Justice and the State of California recommend their approval, including the consolidation of Sacramento and Yuba City in the Sacramento LATA, and the consolidation of Fresno and Visalia-Tulare-Porterville in the Fresno LATA. The Court approves these LATAs.
The Court will not approve the inclusion of San Luis Obispo County in the Los Angeles LATA. Upon notification by the Department of Justice that it has received the necessary assurances from GTE, see note 95 supra, the Court will approve the State's compromise recommendation that the County's residents be served from GTE's facilities in neighboring Santa Barbara, rather than from the Bakersfield LATA, which was the Department of Justice's alternative proposal. In addition to joining the San Luis Obispo's exchanges to facilities in a community with which the county's residents identify, this solution will reduce the size of the Los Angeles LATA somewhat.
The Court approves the Los Angeles LATA in all other respects, and grants the consolidation of Santa Cruz and San Francisco to form the San Francisco LATA. The Los Angeles LATA does not require specific Court approval because, although it includes four SMSAs, the four together constitute only one SCSA. The LATA is large, as some intervenors point out, but the cost of dividing the LATA would be prohibitive.
This is also true with respect to the San Francisco LATA.
The exceptions for EAS routes are also approved as requested.
After having fully considered AT&T's LATA application as well as the decisions of the Department of Justice with respect thereto and the comments of the intervenors, the Court takes these actions.
The following LATAs proposed by AT&T are ordered to be consolidated: Centralia (Illinois) with St. Louis (Missouri); Winchester (Kentucky) with Louisville (Kentucky); Rapid City (South Dakota) with Sioux Falls (South Dakota); and Provo (Utah) with Salt Lake City (Utah).
Sixty-seven of the proposed LATAs include more than one standard metropolitan statistical area, and for that reason, absent a court-ordered exception, they would be required, pursuant to section IV(G)(3) of the decree, to stand on their own. Nevertheless, for the general reasons outlined at slip op. at pp. 12-14, supra, and the more specific reasons detailed under the heading of the respective states, the Court allows the consolidation of the metropolitan areas within these LATAs, with the exception of the following: Eastern Massachusetts; New York Metro (New York); Birmingham (Alabama); Davenport (Iowa); Seattle (Washington); and Cleveland (Ohio).
Because the justification advanced or the information supplied is inadequate, the Court withholds approval of, and requests more information regarding the following LATAs: Albany (New York); Syracuse (New York); St. Louis (Missouri); Detroit (Michigan); Southeast Wisconsin; and Chicago (Illinois); as well as regarding the proposed state line crossings in the New England states. In addition, the Court orders modifications of the Brainerd (Minnesota); Fargo (North Dakota); and Los Angeles (California) LATAs.
The approval of all the LATAs is contingent upon the filing of commitments by the Operating Companies that they will grant equal access to the various interexchange carriers with respect to their intra-LATA as well as their inter-LATA traffic.
With these modifications and exceptions, that part of the plan of reorganization which embodies the LATA application submitted by AT&T and the Department of Justice is hereby approved in accordance with section VIII(J) of the decree.