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UNITED STATES v. WESTERN ELEC. CO.

December 7, 1983

UNITED STATES OF AMERICA, Plaintiff,
v.
WESTERN ELECTRIC COMPANY, INC., AND AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Defendants; UNITED STATES OF AMERICA, Plaintiff, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, et al., Defendants



The opinion of the court was delivered by: GREENE

Ameritech *fn1" has moved the Court for clarification of that aspect of the decree which concerns the treatment of so-called undesignated traffic. The motion raises the question of the obligations of the Operating Companies under the decree with regard to inter-LATA calls made by subscribers who do not designate an interexchange carrier either by presubscription or by use of an access code. See infra. This is by no means an insignificant issue: the estimates of traffic that will not be designated, at least at the outset, range up to 90 percent of all subscribers, and according to some, it will represent billions of dollars in revenue annually. *fn2"

 Ameritech requests permission to route all undesignated traffic to AT&T, and it is supported in that stance by the Department of Justice and, naturally, by AT&T. With equal predictability, several of AT&T's competitors are opposed to that option, and they suggest two alternatives: (1) that the Operating Companies be required to "block," that is, not to complete, the call of any customer who has not designated an interexchange carrier so as to force him to make a designation, or (2) that the Operating Companies be required to distribute such calls among all the interexchange carriers on the basis of some appropriate formula. *fn3" In its Opinion of July 8, 1983, the Court deferred a decision on this issue pending a review by the various interested parties of the legal and practical implications of the several alternatives. 569 F. Supp. at 1109 n.227. These issues have now been developed in several briefs responding to the Ameritech motion.

 I

 At the present time, because of limitations on the Operating Companies' switching facilities, only one carrier -- AT&T -- may be reached without the use of a multiple-digit access code. A customer can place an interexchange call through AT&T by dialing 1 or 0 plus a normal ten-digit number, *fn4" for a total of eleven digits. If a customer wishes to place a call through any other interexchange carrier, however, he must dial a twelve-or thirteen-digit access code plus the ten-digit number, for a total of twenty-two or twenty-three digits. Since this "substantial disparity in dialing convenience has had a significant adverse impact on competition," *fn5" the decree mandates equality of access by all carriers by the following process.

 The decree provides *fn6" that the Operating Companies shall, on a gradual basis, furnish AT&T's competitors access that is "equal in type and quality" to that offered to AT&T, beginning not later than September 1, 1984, *fn7" and ending by September 1, 1986. Equal access will be phased in as various Operating Company end offices acquire the necessary switching capability. As a particular end office reaches the equal access stage, *fn8" any subscriber may choose one of two options for the routing of his interexchange calls: (1) he may dial a four-digit carrier access code ("10XX") instead of the twelve-to-thirteen digits now required, *fn9" or (2) he may predesignate a primary interexchange carrier, that is, he may opt for a switching arrangement by which his interexchange calls will be routed automatically to the selected carrier.

 Two points should be noted, however. First, a subscriber will not be limited to the carrier to which he has presubscribed: he may still reach any other interexchange carrier by dialing that carrier's four-digit access code. *fn10" Second, except for AT&T, which will remain available as a carrier of last resort (see infra), a customer will generally not be able to access an interexchange carrier, either by predesignation or by use of a code, unless he first establishes an account with that carrier. *fn11"

 The issue before the Court relates primarily to the period between September 1, 1984 and September 1, 1986 when equal access will be phased in on an end office-by-end office basis. It is assumed that by that time many, if not most, telephone subscribers will have elected to do nothing: they will not have made arrangements with an interexchange carrier, either by presubscribing to it or by establishing an account which would enable them to reach it through a four-digit access code. The question before the Court is -- should all such traffic remain with AT&T or should the Operating Companies require their customers to make a choice among the interexchange carriers?

 II

 The various interexchange competitors of AT&T *fn12" argue that the decree contemplates an end to the favorable treatment accorded AT&T by the Operating Companies; that the automatic routing of all undesignated traffic to AT&T would perpetuate that company's dominant role in the interexchange market; and that Ameritech's proposal therefore conflicts with the bedrock principles underlying the decree.

 That argument has substantial weight, and were there no compelling countervailing considerations, the Court would be strongly inclined to accept it. But countervailing considerations do exist, of several types: language in the decree itself; expressions of the court and of the parties with respect thereto; and various practical considerations as they affect the public.

 Section A(2)(i) of Appendix B of the decree, while permitting an interim dialing disparity between AT&T and the other interexchange carriers, requires exchange access for these carriers through minimum access codes, and section A(2)(ii) requires the Operating Companies to

 
offer . . . access that permits each subscriber automatically to route, without the use of access codes, all the subscriber's interexchange communications to the interexchange carrier of the customer's designation.

 Ameritech contends that these provisions imply that when a customer neither presubscribes nor dials a 10XX access code, the call is to be completed through AT&T. *fn13" Ameritech also relies on a statement in the Court's August 11, 1982 Opinion that allowed continued dialing inequality because of provisions in the decree which require the Operating Companies to "permit" subscribers to route their calls to interexchange ...


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